Poor response from states on FDI in multi-brand retail It is not surprising to know that the UPA governments’ efforts to build a consensus on permitting foreign multinational retail giants like Wall-Mart Tesco and others evoked lukewarm response even from among the Congress ruled states and UTs. According to the written reply on August 8, 2012 presented in the Rajya Sabha by Jyotiraditya Scindia, Minister of State for Commerce and Industry, so far only two Congress-ruled states (Delhi and Manipur) and two Union Territories (Union Daman & Diu and Dadra and Nagar Haveli) have responded positively to the central government’s letter sent to all states in June 20112 seeking their support for implementing the decision to allow 51% FDI in the multi-brand retail trade. The two states and two UTs put together constitute only a microscopic minority of 1.67 percent (20. 05 million) of the country’s population. Of course he poor response from even Congress-ruled states should be viewed as severe a setback for the government's efforts to open up the sector. It is obliviously adds strength to the stiff opposition from a spectrum of political parties such as Bharatiya Janatha Party, Communist Parties, AIADMK, Trinamool Congress, Samajwadi Party, Janatha Dal (U) and others to the move to allow foreign retailers such as Wal-Mart, Tesco and others in the lucrative multi-brand retail sector, besides the traders bodies all over the country. There is no truth in Mr. Anand Sharma’s statement that allowing FDI in retail will usher in huge benefits and create jobs; will help build the supply chain, cold storages and benefit the farm sector; and will help in efforts to reduce wastage of fruits, vegetables and other products and tame inflation. The truth is that allowing FDI in the sector will hurt small stores, kirana shops and the hawkers and lead to massive job losses. A book by this commentator entitled, “FDI in Multi-brand Retail Trade: A Retrograde Step,” is going to be published within the next fortnight by M/s RAC Publications, Chennai. It is the outcome of deep research. The study concludes by stating as follows: “Evidences from various parts of the world indicate that widespread emergence of big format retail super stores have lead to extensive ruin of retail stores/shops thereby resulting in the loss of employment and livelihood to millions of persons involved in retail trade. Research findings have exposed that large scale unemployment has proved to be a social dynamite. That is, increase in unemployment leads to a series of social problems, like rise in poverty, alcoholism, domestic violence, indebtedness, suicides and crime in general, leading to a chaotic situation in the society. In sum, the inescapable conclusion is that any disruption of the prevailing system of retail trading will affect all sections of Indian society. FDI in retail trade will not serve any purpose. It will do more harm than benefit the people, especially to the unorganised/informal retail sector."

Dr.C.Murukadas,The Times of India, August 9,2012