A day after the government opened the floodgates for foreign direct investment (FDI) in multi-brand retail, commerce and industry minister Anand Sharma said that the policy intends to solve four issues related to job creation, infrastructure, inclusion of farmers and consumer interest.
?The philosophy behind the policy involves four issues. While India is the largest producer of food grains, infrastructure needed for post harvest, storage and integrated cold chain is still a challenge. Second, it has responded to farmers’ needs by saving perishables like fruit and vegetables and offering them competitive pricing. Moreover, not only will it create jobs but also safeguard consumers? interest by giving them more options and products to choose from,? Sharma said in an interview to FE on Friday.
On Thursday, the government allowed foreign retailers to open stores in cities that have a population of less than one million. It also diluted the 30% sourcing norm and permitted retailers to source goods from medium, small and micro enterprises, with an investment cap of $2 million instead of the earlier ceiling of $1 million. Further, sourcing can continue even after the $2 million investment cap is breached.
To address another concern, the government said that at least 50% of total FDI brought in the first tranche of $100 million will be invested in creating backend infrastructure within three years.
?We don?t need to go to Parliament as there are no major changes. Our move is justified because we have given more clarity and flexibility,? Sharma added.
