‘Letter doesn’t mean end of FDI in retail’

Even as conflicting views on SEZ policy continue to simmer, the Congress has another balancing act to do--between its aam admi constituency and reformists...

Even as conflicting views on SEZ policy continue to simmer, the Congress has another balancing act to do–between its aam admi constituency and reformists, this time on the extent and nature of FDI in the retail sector.

The party today confirmed that president Sonia Gandhi had written to the Prime Minister raising concerns about the entry of “transnational” players in retail, but at the same time asserted that reforms in the sector would continue. “The letter is not taking any extreme position. It is not calling for stopping of the process, nor is it an allowance without safeguards to opening up the sector,” party spokesperson Abhishek Manu Singhvi said, claiming this was yet another instance of the party raising its aam admi concerns with the government.

Dismissing suggestions that the Congress opposition to MNCs is a move to help Indian players, Singhvi said what is to be noted is the “spirit” of the letter and “not the micro details”. Sonia Gandhi wanted the PM to take note of the impact of MNC on small manufacturers and retailers.

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Senior ministers, particularly Finance Minister P Chidambaram and Commerce Minister Kamal Nath, are unanimous that retail is India’s next growth engine. They insist the entry of big players will reduce middlemen and benefit both producers and consumers besides creating more than 10 million jobs.

“Organised retailing is set to boost infrastructure growth and create efficient backward linkages. In the process, the sector will also create efficiencies, reducing marketing cost, wastages and redundancies,” Kamal Nath says.

But leaders who hotly contest this say the party will be committing political hara-kiri. The large number of small and marginal traders will be unable to withstand the new wave, says Congress MP P J Kurian, a staunch opponent of FDI. AICC general secretary Digvijay Singh says Sonia’s concerns are valid and needs to be looked into.

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