The government will inform Parliament soon that six more states have extended their support on the contentious decision to allow 51% foreign direct investment in multi-brand retail trading. Maharashtra, Haryana, Jammu & Kashmir, Andhra Pradesh, Uttarakhand and Assam will be included among states willing to embrace this policy, in an amended reply which the ministry of commerce and industry proposes to give in the Rajya Sabha next week.
While minister of state for commerce and industry Jyotiraditya M Scindia had informed the Upper House on Wednesday that his ministry received written commitments only from two states and two Union territories till date over FDI proposal, commerce and industry Minister Anand Sharma told PTI on Thursday: ?There is an error which has crept in. The (Commerce and Industry) ministry has been asked to amend that reply… I shall inform Parliament about the correction. There is a discrepancy in that.?
Scindia’s revelation was an embarrassment for supporters of the policy in the UPA government that had claimed that the policy was gaining support from a lot of states. Sharma had earlier said that several states were in support of the Centre’s decision and the policy could be implemented in those states, while states opposed to the policy would be free to disallow foerign investnment in the sector. The decision, of course, would be subject to the rider that foreign retailers would invest only in cities with population of more than a million.
A senior official of the department of industrial policy and promotion (DIPP) told FE that information given by the junior minister in Parliament did not include confirmations received earlier from states during discussions with the centre. Source said that error in reporting states’ confirmations was because only two states (Delhi and Manipur) and two union territories (Daman & Diu and Dadra and Nagar Haveli) replied to the Centre’s recent letter (dated June 19) to states on the issue. The other six had given their consent earlier. “The amended reply will clarify the government’s position. It could come as early as Monday,? he said.
Government went on to build consensus over the issue after a November 24 Cabinet decision to allow 51% FDI in multi-brand retail met with stiff opposition from UPA allies and other Opposition parties. The decision has been put on hold since then pending approval from state governments.
In the reworked list, sources said that Maharashtra and Haryana have supported FDI proposal citing the benefits to their agricultural economies while Uttarakhand and Jammu & Kashmir want investment from global multi-brand retailers to give a push to their fruits and vegetables business. Assam wants to use the platform for improving its horticulture business while Andhra Pradesh reckons that FDI in retail would give a push to development of agriculture and supply chain infrastructure. Global retail giants like Wal-Mart, Tesco, Carrefour are awaiting the policy change to set up supermarket stores in India.