FDI
in multi-brand retail was being touted as the big bang reforms that
will leap-frog India's growth. But the notification to allow 51 percent
FDI in retail trade evoked strong condemnation and disapproval from all
sections--political parties, traders’ bodies, farmers’ associations,
experts and the public in general. In fact, all political parties
barring the Congress Party, Nationalist Congress Party, Rashtriya Lok
Dal and Rashtriya Janata Dal, vehemently opposed the move to allow the
multinational retail giants to open shops in the country. Now, the
Cabinet decision to liberalise the norms allowing foreign investment in
multi-brand retail stores has caused grave anxiety and condemnation of
cross-section of Indians. The general opinion among political leaders,
experts and others is that the UPA government took an unusually strange
and adamant stand on the vital issue of allowing FDI in multi-brand
retail trade. It refused to heed to unprecedented public sentiment and
opposition from almost all political parties, the entire trading
community, farmers’ associations, experts, social activists and the
public in general. Reports suggest that the government became
susceptible to powerful lobbying. Wal-Mart and other multinational
retail giants have been relentlessly lobbying to pressurise the Indian
Government to allow FDI in multi-brand retail trade. Many believe that
once again the government has succumbed to the pressure of the
multinational retail giants and their home governments.
The action of the government in modifying the regulations and norms
for FDI in multi-brand retail is particularly flawed because of the fact
that the opposition leaders have indicated that a change of government
in 2014 or even earlier might see scrapping of the decision to allow FDI
in retail trade. The general temper of political opinion in the country
on FDI in retail trade was sounded by AIADMK leader V. Maitreyan in the
Rajya Sabha on December 6, 2012 as follows: “The people will reply in
the 2014 polls and I give a solemn assurance that the next government
that comes to power will reverse this decision of the UPA.” Senior BJP
leader Murli Manohar Joshi stated that FDI in retail would be scrapped,
if NDA is voted to power in 2014 general elections. Convener of
National Democratic Alliance (NDA) Sharad Yadav said that if NDA is
voted to power in general election of 2014, it will reject the current
notification of allowing FDI in retail trade.. On December 11,2012, CPM
General Secretary Prakash Karat warned that left parties would not allow
even a single Wal-Mart outlet to be set up in the country. The
decision to ease the norms around the number of cities that qualify for
FDI in multi-brand retail is in stark contrast to the recommendations of
the Standing Committee Report on FDI.
