FDI in multi-brand retail to benefit farmers, exports: Kaushik Basu

NEW DELHI: Chief Economic Advisor Kaushik Basu has favoured opening up of multi-brand retail sector and said the move would help in improving farmers' condition and boost India's exports.

"This is (allowing FDI in multi-brand retail) actually more than just a small change. It can improve the condition for our farmers, increase India's exports," he told in an interview to a news channel.

Basu said that opening retail sector to international multinational corporations, would be an important policy reform.

Following strong protest from its key ally Trinamool Congress, the UPA government has suspended its decision to allow 51 per cent FDI in the politically sensitive multi-brand retail sector.

He also pitched for decontrol of diesel prices partially and intelligently. However, he said that the move would take some time.

"It is not going to happen in next couple of weeks but this is also like FDI, something which I feel is entirely possible for the next couple of months," Basu added.

In India, oil marketing companies are free to determine petrol prices, but diesel, LPG and kerosene are sold at discounted prices.

Further, Basu said that the next six months are crucial for the government.

"There is a six-month window and yes it is true that if we do not manage to do enough...the economy after that will register that," he added.

On Goods and Services Tax (GST), he said that it would take more than six months to implement this reform measure.

"...it (GST) needs constitutional amendment and it will be foolish to say that it will be happen in six months," Basu said.

The proposed GST would subsume most indirect taxes like excise duty and service tax at the central level and VAT on the state front, besides local levies.