Mumbai: Terming the decision to invite foreign direct investment (FDI) into the retail sector as a major reform measure, leading industry body CII on Monday said it will greatly improve investment sentiment.
"At a time when declining investments have led to slower GDP growth, the entry of foreign funds in retail as envisaged by the government would go a long way in boosting confidence," Confederation of Indian Industry (CII) president B Muthuraman said in a release here.
FDI in multi-brand retail will give a boost to the organised retail sector, which positively impacts several stakeholders, including farmers, consumers, MSMEs and hence, the overall economy, he said.
"The CII hopes to see an early consensus on the issue among the political leadership. It is in the national interest and, therefore, we are hopeful that all significant political stakeholders would converge on the subject soon," he added.
Opening up of retail to FDI can increase the organized retail market size to USD 260 billion by 2020, as per a recently released CII study.
This would result in an aggregate increase in income of USD 35-45 billion per year for all producers combined, 3-4 million new direct jobs and around 4-6 million new indirect jobs in the logistics sector, contract labour in the distribution and repackaging centres, housekeeping and security staff in the stores, it added.
The government also stands to gain by this move and can be expected to receive an additional income of USD 25-30 billion by way of increased tax collection and reduction of tax slippages, the release said.
First Published: Monday, December 05, 2011, 20:55