Govt faces attack from friends, foes

Written by fe Bureau | New Delhi | Updated: Nov 29 2011, 08:41am hrs
The Union Cabinets decision to allow 51% FDI in the supermarket sector has met with stiff resistance from a number of state governments, putting a question mark on the viability of the move. The requisite permissions for multi-brand retail ventures involving FDI have to be given by the state governments.

While all BJP-ruled states, Uttar Pradesh, run by the BSP and even some UPA allies are opposing the move, some Congress-ruled state governments like Haryana and Kerala too are wary of allowing the likes of global retail giants like Walmart and Tesco to set up shop in their states.

Bihar deputy chief minister and Finance Minister Sushil Modi said that his government has taken a stand against the cabinet's decision. "We are of the opinion that organisations like Walmart, Tesco are not required at this stage as it will hamper small shop owners and farmers," he said. Speaking to FE, Gujarat finance minister Saurabh Patel echoed this view.

Haryana excise and taxation minister Kiran Choudhry was cautious, too. She said small traders and farmers could be affected by the move in the long term. Choudhry added that the state government will definitely look into the issue and whatever best was in the interest of the state would be done. "...so far as luxury items are concerned, it (allowing FDI) is a good idea, but so far as the common man is concerned, we will have to look into it," she added.

Delhi Revenue Minister A K Walia said that the subject is in the chief minister's domain, and state was yet to study it. Both Haryana and Delhi are run by Congress-led governments. Kerala Pradesh Congress Committee president Ramesh Chennithala said the party's state unit advised the ruling Congress-led government not to allow FDI in multi-brand retail.

West Bengal Finance Minister Amit Mitra, who belongs to Congress ally Trinamool Congress, said that his party has opposed FDI in multi-brand retail. "We have no evidence to support that it (FDI in retail ) will be beneficial for small businessmen," Mitra added.