Claiming that global experience showed FDI leads to job losses and that Delhi is not prepared for FDI, the two-week-old Aam Aadmi Party government in the capital Monday announced that it had withdrawn the approval given to FDI in multi-brand retail by the previous Congress government.
Chief Minister Arvind Kejriwal said the decision was taken to address the huge problem of unemployment in Delhi and that it had been communicated to the Union commerce and industries ministry through a letter on January 1.
The new CM also stressed that his party was not against FDI per se but that the decision on FDI “ought to be decided on sector to sector basis”. But the Centre said the Delhi government could not reverse this decision just like that.
“My first reaction is that states cannot just walk in or out of this commitment. Those which had accepted they will allow FDI under multi-brand retail had signed a legal agreement with us, based on which we had issued the notification,” Commerce Minister Anand Sharma told The Indian Express.
Sharma said he would have to check on the details with officials in the Department of Industrial Policy and Promotion “but that is how I see it at present”. Kejriwal said withdrawing FDI from multi-brand retail was part of the AAP manifesto. “Whatever information is available shows if there is FDI in retail, it improves consumer choices, however, experience worldwide shows that it leads to loss of jobs worldwide also,” Kejriwal said. Last year, the central government permitted 51 per cent FDI in multi-brand retail trading and left its implementation to the states. While Congress-ruled states had agreed to implement the policy, Delhi has become the first to change its mind.
“The data of the centre is not corroborated by the experience worldwide. Unemployment is a huge issue in Delhi presently and it came down to being a decision between addressing unemployment issues in the city and providing consumers with choices, and I chose the former,” Kejriwal said. “There is no conducive environment provided to the retail sector to start business. This sector faces so much corruption in every stage. In the next few days, I will hold a meeting with people from industries and traders to ask what kind of bottlenecks are faced by them and what can be done to generate wealth,” the CM said. “We are committed to creating an honest environment which is corruption-free and the anti-corruption helpline is a move towards this. With the proper environment expansion of retail trade is possible,” he said.
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The letter from the commissioner of industries Amit Yadav to the DIPP secretary said: “The government of NCT of Delhi had extended its support to the government of India’s decision for liberalisation of foreign direct investment policy in multi-brand retail trade with certain suggestions. In this connection, I am directed to inform 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…In view of the above, the letter from Government of NCT of Delhi may be treated as withdrawn.”