Farmers will benefit, small retailers won’t be hit: Centre to SC

Questioned about the impact of its policy on FDI in multi-brand retail on the right to livelihood of small traders, the Centre on Friday told the Supreme Court that the equation between small retailers and large outlets will not change adversely by the mere fact that capital invested is foreign.

A Bench led by Justice R M Lodha had last month asked the Centre if its FDI policy was only a "political gimmick" or had fructified into some investments as well. It also sought a response from the Attorney General over apprehensions of small traders by February 28 when the matter will be heard next.

In an affidavit by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, the Centre has said farmers would benefit from direct sales to organised retailers and the policy would not destroy trade or pose any threat.

It referred to organised retails already operating in India, such as Big Bazaar, Shoppers Stop, etc, saying: "Multi-brand retail trading is also a form of organised retail, the only difference by the policy to allow FDI in retail is that capital investment is by foreign entities. The fact that capital invested is foreign would not materially alter the equation between small retailers and large outlets."

Relying on a 2008 government study on organised retailing, it said direct employment in retail will drive the growth of a number of activities in the economy, which will create further employment.

Highlighting the safeguards, the affidavit said the policy mandated that at least 30 per cent of the value of manufactured or processed products shall be sourced from Indian small industries and also that outlets would be set up only in cities with a population of more than 10 lakh as per the 2011 census.

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