Singh's on song, scripts key role for FDI in retail

NEW DELHI: Having progressed significantly on the political front, by way of improved relations with China and Pakistan, Prime Minister Manmohan Singh has now set out to put big-ticket economic liberalisation on the fast track. On the agenda is the speedy opening up of the retail sector to foreign direct investment (FDI) and measures to end inspector raj. Both measures are expected to widely benefit India Inc, cutting across a spectrum of sectors. The PMO's initiative has shut the door on trade associations which have been opposing FDI in retail. The commerce and industry ministry will soon circulate a Cabinet note for calibrated opening up of the retail sector to FDI, highly-placed government sources said. In case of red tape, a committee headed by Anwarul Hoda, member (industry) at the Planning Commission, has been set up to outline the measures that need to be taken by the Centre. Dr Singh is closely monitoring these two issues and progress on these initiatives could be expected soon, sources said. The committee has been asked to submit its report by June. It is understood that the opening up of FDI in retail is being designed in such a way that many sectors — including agriculture, food processing, manufacturing, packaging, and logistics — reap benefits. The view within the government is that exports would also get a shot in the arm once FDI in retail is allowed. Multinationals who invest in India would also source goods for their international outlets from India, the commerce & industry ministry argued. Indian retail chains would get integrated into global supply chains since FDI will bring in the technology to improve production, quality standards and marketing. The Centre for Policy Alternatives and ICRIER have recommended a gradual opening up of retail to FDI. The alarm over threats to small retail outlets and the flood of imports due to foreign investment in this sector are seen as exaggerated. In order to do away with inspector raj, the government is considering ways to check repeated inspection of industrial units by various government authorities. It is felt that excessive powers have been vested with these authorities without adequate accountability and transparency. If the Centre acts against harassment by inspectors, state governments would also be encouraged to take similar steps. The Hoda committee has invited suggestions from domestic industry, apart from various central government arms, including the labour ministry, the Central Board of Direct Taxes (CBDT), Central Board of Excise & Customs (CBEC) and the industry department. The panel's recommendations are expected to outline measures that can be implemented by the Centre and the state governments to address the concerns of the domestic industry. On FDI in retail as well as the removal of red tape, the Prime Minister's Office is working on the basis of inputs provided by the Planning Commission. The measures discussed in the mid-term appraisal of the 10th Plan have been circulated to the concerned ministries, it is learnt. Some of the suggestions for checking inspector raj will be incorporated in the proposed law on small & medium enterprises. It is understood that a draft Cabinet note on the Small and Medium Enterprises (SMEs) Bill is already in circulation. The proposed legislation is aimed at streamlining the inspection process, simplifying reporting of compliance and record keeping to benefit industry.

Singh's on song, scripts key role for FDI in retail

Having progressed significantly on the political front, by way of improved relations with China and Pakistan, Prime Minister Manmohan Singh has now set out to put big-ticket economic liberalisation on the fast track.

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