FDI will kill Indian retail, small industry

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The BJP on Wednesday trashed Government’s FDI in multi-brand retail move by emphasising every change was not a reform since they may end up hurting national economic interests. Blaming the Congress for all-round economic crisis, the Opposition party also announced that it will coordinate with other parties in the forthcoming session of Parliament to stall the FDI move.

In a strong worded criticism of FDI in retail, Leader of Opposition Arun Jaitley said that in the first instance manufacturing sector jobs will be lost in India. “International structured retail sources internationally leading to a drop in domestic manufacturing. This is all the more significant since India has not carried out significant manufacturing sector reforms,” Jaitley said, while moving an economic resolution at the BJP’s national council meet here.

“It is being said that BJP is not spelling out its stand clearly on FDI in retail. We want to say FDI in retail will hurt the livelihood of the small retail trader. Our leaders will raise this issue strongly in the next Parliament session,” BJP chief Nitin Gadkari said, adding the BJP will coordinate with other Opposition parties in Parliament.

Jaitley said nearly 51 per cent of India’s working population is self-employed and structured international retail will be harmful to job creation in India.

“In the first 12 years of opening retail for FDI, Thailand had witnessed 38 per cent of consumer market consolidate in favour of three large retailers. The often quoted example of China is misconceived. China as a low cost economy is the predominant and the largest supplier to the big retailers. It can’t be argued that goods manufactured in China will not be sold only in China,” the BJP leader said.

Jaitley blasted the myth that the middlemen will be eliminated and the benefits will go to the producer and farmers if FDI in retail is allowed. “The International Farm Companies Network (IFCN) data shows that in the US a milk producer gets 38 per cent of every consumer dollar spent. In the UK, this figure is 36 per cent. In India, riding on the strength of the cooperative movement, milk producers get 70 per cent of every rupee spent by the consumer. If farmers in the USA and UK have become prosperous due to retailers, why does the USA or the EU subsidise their farmers to the extent of US$400 billion annually? This is a staggering Rs 5,000-Rs 6,000 crore daily,” Jaitley said.

The BJP leader claimed that party’s commitment to reforms was a commitment to ‘reforms’ which are in national interest. “Reforms are not what Western powers define “reforms” to be. Let the Western powers realise that the biggest reforms required are in elimination of agricultural subsidy, removal of restraints on outsourcing, unreasonable restriction on visas and dismantling of unfair trade barriers on products of smaller economies,” Jaitley argued.

Former BJP chief M Venkaiah Naidu blasted the UPA for the economic crisis and said it did not capitalise on the robust economy that NDA handed over to BJP in 2004.

“Even the Finance Minister while presenting the budget on July 8, 2004, admitted the achievements of the NDA Government when he said the economic fundamentals appear strong and the balance of payments is robust,” Venkaiah said.

BJP’s economic resolution blasted the Congress for ruining economy whenever they were in power.

“Corruption is at root of all problems the country is facing today. The first 11 names that have surfaced in Coalgate belongs to the Congress and it allies. This will prove to be the worst ever scam that India has witnessed till date,” reads the party document.

The BJP said that single biggest failure of the economist Prime Minister has been in managing the economy and controlling economic situation. “People are reeling under continuously rising prices of sugar, edible oil, pulses, vegetables, milk and many other food and non-food items,” its said.

Taking a dig at PM for his remarks that money does not grow on trees, the BJP shot back saying even votes do not grow on trees.

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