Flaying the Centre’s decision to allow FDI in retail, Tamil Nadu CM Jayalalithaa on Sunday alleged it was taken under pressure from a few retail giants and asserted her govt would not allow multi-brand global players to set up their markets in the state.
Strongly opposing the decision to open up retail trade to FDI, Jayalalithaa demanded that the Congress-led UPA 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.
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.”
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. Uttar Pradesh Chief Minister Mayawati on Sunday said Foreign Direct Investment (FDI) in retail sector would make Uttar Pradesh a bankrupt state.
“If this is allowed, UP will become ‘Kangal (bankrupt) Pradesh’ in the next five years as local traders will be forced to shut shop,” Mayawati said in Lucknow on Sunday.
The Union Cabinet on 24th November approved 51 percent FDI in multi—brand retail, paving the way for global giants like WalMart to open mega stores in Indian cities.