Parliament panel seeks regulator for FDI in multi-brand retail
New Delhi: Cautioning that the entry of foreign retail giants could create joblessness, a Parliamentary panel on Tuesday asked the government to set up a 'Retail Regulatory Authority' to deal with issues concerning foreign multi-brand retail companies in the country.
"We have recommended a regulatory authority to look into the problem (impact of FDI in multi-brand retail on MSMEs)," Tiruchi Siva, DMK leader and Chairman of the Parliamentary Standing Committee on Industry, told reporters here.
According to Siva, if multi-brand retail chains are not regulated well, it will impact medium, small and micro enterprises (MSMEs), farmers and domestic mandis.
"Once...Mandis are eliminated, the big foreign retail giants will manipulate prices and our farmers will be forced to sell their products at low prices dictated by them (foreign retailers), the panel said in a report.
"Our own squeezed out retailers and all those associated with the market and retail trade would lose their livelihood and become jobless. It will add to our already existing social and economic woes, which generate so much unrest and violence."
Siva was of the view that multi-brand chains should be regulated so that customers are not fleeced and farmers are not under-paid for their produce.
Taking serious note of the implementation of sourcing norms, the committee suggested the 30 percent procurement requirement should be applicable item-wise.
While allowing 51 percent FDI in multi-brand retailing, the government made it mandatory for at least 30 percent of the value of manufactured or processed products to be sourced from small industries.
The panel also suggested the MSME ministry should commission a survey to assess the benefit and losses of previous FDI policies on the MSME sector to ascertain if they have created any back-end infrastructure, imparted skills to domestic manpower or upgraded managerial skills, as is being envisaged in the current FDI policy.
The committee was also of the view that an institutional monitoring mechanism is essential to remove any unwarranted consequences of the policy on FDI in retail.
The panel said it concurs with the recommendation of the Parliamentary Standing Committee on Commerce that "there is a need for setting up of a retail regulatory authority to look into the problems and act as a whistle blower in case of anti-competitive behaviour and abuse of dominance."
Siva said, "They are saying that they will create lakhs of jobs. It is not true. What today is done by thousands, they will get it done by hundreds."
Since the approval of 51 percent FDI in multi-brand retailing in September, no multi-national company has approached the government to set up stores in India.
The panel also recommended strengthening of public sector undertakings, saying about 70 percent of them are not sick and are making profits.
The committee recommended the revival of Nagaland Pulp and Paper Company, Madras Fertilizers Limited and Fertilisers and Chemicals Travancore Limited.
According to Siva, the panel has suggested that these fertiliser plants should get gas at a price on par with naphtha, which is being used as fuel.