IANS | 13th January 2014
Delhi government to reverse FDI in multi-brand retail
The Arvind Kejriwal-led Delhi government Monday said it will not allow foreign direct investment (FDI) in multi-brand retail, reversing the previous Sheila Dikshit regime’s policy.
In a letter to the department of industrial policy and promotion (DIPP), the Delhi government asked the central government to remove Delhi from the list of the states that have allowed FDI in multi-brand retail.
"I am directed to inform you that government of NCT of Delhi has reviewed its earlier decision and it has been decided not to support Foreign Direct Investment policy in multi-brand retail trade," said the letter signed by Industries Commissioner Amit Yadav.
Kejriwal told reporters here: "We do agree that if there is FDI in retail, it improves the consumer’s choice... But experience world over shows that it leads to loss of jobs to a very, very large extent."
"Right now, the kind of situation that we see in Delhi, there is huge unemployment and the Aam Aadmi Party does not wish to increase this unemployment," he added.
Kejriwal, however, said he was not against FDI per se, saying this should be decided on a sector to sector basis.
He said that entire retail sector has not been given a conducive and honest business environment to do business as there are "bottlenecks" in terms of corruption at every stage.
"It is private trade business which actually increases wealth and generates employment and we are committed to creating an honest environment for the people to do business and industry," he said, adding he will meet the traders and industrialists of Delhi in a few days over the problems they face.
The Aam Aadmi Party (AAP) in its election manifesto had promised reversal of the FDI in multi-brand retail policy.
The Dikshit-led Congress government had agreed to implement the FDI in mult-brand retail policy as decided by the union cabinet.
Industry bodies express disappointment
Will hamper investment sentiment: Sidharth Birla
"This direct negation without demonstrating a search for a viable alternative or via media would hamper investment sentiment for the state (of Delhi)," said Federation of Indian Chambers of Commerce and Industry (FICCI) president Sidharth Birla.
He said multi brand retail would help in reducing wastage of food products, thereby controlling inflation, adding that FDI was "an alternate capital and technology source". Birla said both large multi brand retail stores and small "kirana stores" can co-exist peacefully.
Political risks for global investors will increase: D.S. Rawat
"It is not a question of allowing or not allowing foreign investment in retail.. what has happened in Delhi is the reversal of the decision taken by the previous government of the Congress Party," said Assocham secretary general D.S. Rawat.
"If one party reverses the decision of its rival dispensation upon change of guards, the policy and political risks for global investors would definitely increase in India, scaring them away," he said.