“The big stores that would be opened would be owned by the American or British companies, the goods would be of Chinese origin while India would become a nation of sales boys and sales girls,” Jaitley said during the debate on AIADMK’s motion seeking the withdrawal of the decision to allow 51 per cent FDI in multi-brand retail.
Attempting to debunk the government’s argument that it had left it to the states to decide whether or not to allow MNC stores within their territories, Jaitley said the claim was “misleading” since FDI was a central subject. “You are opening a window that will be used by these companies to open the doors and set their foot everywhere,” he warned.
Jaitley said a “fragmented market” was much better for India at its current stage of development. “A consolidated market benefits neither the producer nor the consumer. Today the situation in India is not such that a consolidated market can be created,” he said. “Every change is not a reform. We are blindly following the western definitions of economic development whereas the situations in those countries are entirely different.”
He cited several studies to argue that entry of large retail stores does not lead to an increase in the income of the producer, or bring the prices down for the consumer or eliminate middlemen. “We are also being told these companies will create back-end infrastructure. Now we know, they are not going to create roads or produce power. Government says they will compulsorily have to invest in cold chains. Now, how impossible it is to create cold chains. Can we not do it ourselves? Already we are hearing these companies have started contracting Indian firms for building cold chains,” he said.
CPM’s Sitaram Yechury said any FDI must do three things: strengthen domestic industry, create employment and bring in new technology. “FDI in multi-brand retail will do none of these, and therefore our party has been consistent in opposing it,” he said. “It would be enlightening for you to know that just 1.2 per cent of Walmart’s global workforce of about 1.6 million lives above poverty line in their respective countries.”
JD-U’s N K Singh sought to inquire from the Prime Minister, who sat through the first four hours of the debate, whether “this was the most important of all the economic reforms” that the country needed. “But if you have decided to force this on the nation, would the government consider introducing some safeguards, like a model contract between the stores and the farmers from who they will source their products so that the producer is protected,” he asked. He also urged the government to set up a national regulator in the retail sector.
Earlier, initiating the debate, AIADMK’s V Maitreyan said that in case his motion was defeated, he was sure that his party “would play a pivotal role at the Centre” after the next elections. “At that time, I am assuring you, we will reverse this decision,” he said.