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Jaya slams Centre's 'ill-advised' move to allow FDI in retail

Source: PTI
Last updated on: November 27, 2011 17:15 IST
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Flaying the Centre's decision to allow Foreign Direct Investment in retail, Tamil Nadu Chief Minister Jayalalithaa on Sunday alleged it was taken under pressure from a few retail giants and asserted her government would not allow multi-brand global players to set up their markets in the state.

Read: Jayalalithaa'sĀ press statementĀ opposing FDI in retail

Strongly opposing the decision to open up retail trade to FDI, Jayalalithaa demanded that the Congress-led United Progressive Alliance government reverse the 'ill-advised' move as it would not serve to bring down inflation or improve market efficiency.

Rather, the domestic manufacturing and services sector would take a serious hit and the retail trade completely taken over by the MNC dominated big retail giants which is not good for the country, she said in a strongly-worded statement.

"While Parliament is in session, this move of the Government of India..without even consulting the state governments is unprecedented and indicates the overweening arrogance of the UPA goverment," she said.

The FDI policy in the retail sector was a "sensitive issue and by making this sudden announcement ignoring the sentiments of the people, the Central government has stirred the "proverbial Hornet's Nest," she said.

Jayalalithaa described the Centre's move as a "wrong decision, taken under pressure from a few retail giants starved for capital infusion for their furture survival."

Justifying her stand, she said her government "will not allow the multi brand global players as permitted under the new policy to set up their hyper markets in Tamil Nadu."

While the government talked about creation of jobs for 10 million in the next three years, "it will lead to 40 million people being uprooted and thrown out from their business, she said.

Jayalalithaa said the purported intention behind the move seemed to be bringing more foreign investment to India and to bring down double digit inflation which was mainly "due to the series of policy blunders" made by the Congress-led UPA.

The Centre "should realise that constraints on farm products on the supply side, cannot be addressed through the FDI route, but only by squarely addressing the infrastructural constraints through appropriate policy support."

Elaborating on her contention, Jayalalithaa mentioned the cases of the UK and Thailand where retail chains reportedly controlled the major share of the market.

She said the MNC experience in many countries showed that the "price mark up by such MNCs is much higher than what is being charged by the small vendors."

Holding that "any amount of safeguards will not be any use in protecting the interests of the domestic sector," Jayalalithaa demanded that the Centre's decision be reversed.

"The Centre's announcement has come as a thunderbolt and shocked millions of small vendors who have been completely taken off guard," she said.

As the decision would affect the livelihood of millions of small departmental store owners and "completely destroy the unorganised retail sector within the next couple of years," Jayalalithaa said she strongly opposed the move to open up the retail trade to Foreign Direct Investment.

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