Ruling govt will benefit
But it would take a few years before we get to realise the fruits of the seeds of FDI in multi-brand retail. It will also take a while to get to know who really benefits. Meanwhile, many of the multi-brand retail chains have started building their back-end network, which would undoubtedly benefit our infrastructure sector.
FDI Bill gave a substantial trigger to the market by reinforcing investors’ confidence in the government. It has given a strong push to the retail sector in country, as many retail giants have already started working on their expansion plans. There are many contradictory theories among political parties and industry experts about long-term benefits of FDI, with minimum 30% outsourcing from local manufacturers. Logically, the overall GDP of country would increase, farmers would get more returns, end-consumer will get benefits, better storage facilities would be developed, but it would take a considerable amount of time.
Hence, there are no immediate benefits to anybody, except the ruling government, which stands to gain the trust of its voters by implementing these reforms ahead of 2014 general elections
The author studies at the Faculty of Management Studies, Delhi University. This entry is part of the FE Mastermind contest. Views are personal
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