Even the entire retail business is almost in limbo, and not a single penny has come in as a FDI in almost a year, a parliamentary panel has asked the government to set up a 'retail regulatory authority' to deal with issues concerning FDI in the multi-brand segment and cautioned that the unregulated entry of foreign giants could create joblessness.

 

"We have recommended a regulatory authority to look into the problem (impact of FDI in multi-brand retail on MSMEs)," Tiruchi Siva, DMK leader and chairman of the parliamentary standing committee on industry, told reporters.

 

Reacting to the suggestion to set up a regulatory authority for retail, commerce and industry minister Anand Sharma said these are executive functions. "These are the executive functions. These are not functions to be dealt by the standing committees," Sharma told reporters.

 

According to Siva, if multi-brand retail chains are not regulated well, it will impact medium, small and micro enterprises (MSMEs), farmers and domestic mandis."Once…mandis are eliminated, the big foreign retail giants will manipulate prices and our farmers will be forced to sell their products at low prices dictated by them (foreign retailers), the panel said in a report.

 

 "Our own squeezed out retailers and all those associated with the market and retail trade would lose their livelihood and become jobless. It will add to our already existing social and economic woes, which generate so much unrest and violence."

 

Siva was of the view that multi-brand chains should be regulated so that customers are not fleeced and farmers are not under-paid for their produce. Taking serious note of the implementation of sourcing norms, the committee suggested the 30 percent procurement requirement should be applicable item-wise.

 

While allowing 51 percent FDI in multi-brand retailing, the government made it mandatory for at least 30 percent of the value of manufactured or processed products to be sourced from small industries. The panel also suggested the MSME ministry should commission a survey to assess the benefit and losses ofprevious FDI policies on the MSME sector to ascertain if they have created any back-end infrastructure, imparted skills to domestic manpower or upgraded managerial skills, as is being envisaged in the current FDI policy.