SME Times News Bureau | 22 Sep, 2012
Prime Minister Manmohan Singh Friday said the decision to allow
foreign investment up to 49 percent in organised retail trade will not hurt
small traders and mom and pop shop owners.
In his address to the nation, the prime minister said: "Some think it will
hurt small traders. This is not true."
The prime minister, who explained why his government was going forward with
economic reforms, said modern retail was present in India and that it had not affected
the growth of small shop owners.
"Organised, modern retailing is already present in our country and is
growing. All our major cities have large retail chains," he said on the
day when the Trinamool Congress exited from the ruling UPA demanding a rollback
of last week's government decisions.
"Our national capital, Delhi,
has many new shopping centres. But it has also seen a three-fold increase in
small shops in recent years."
Manmohan Singh pointed out that foreign investment in retail will help farmers,
create cold chain storage infrastructure to save perishable items like fruits
and vegetables and create millions of new jobs.
"According to the regulations we have introduced, those who bring in FDI
have to invest 50 percent of their money in building new warehouses,
cold-storages, and modern transport systems," he said.
"Wastage will go down; prices paid to farmers will go up; and prices paid
by consumers will go down. The growth of organised retail will also create
millions of good quality new jobs."
The prime minister further said that state governments have been empowered to
allow foreign investments in retail or not.
"State governments have been allowed to decide whether foreign investment
in retail can come into their state. But one state should not stop another
state from seeking a better life for its farmers, for its youth and for its
consumers."
Singh compared the decision to allow organised retail to the one taken in 1991
for opening the manufacturing segment to investments from abroad.
"In 1991, when we opened India
to foreign investment in manufacturing, many were worried. But today, Indian
companies are competing effectively both at home and abroad, and they are
investing around the world,"
"More importantly, foreign companies are creating jobs for our youth - in
information technology, in steel, and in the auto industry. I am sure this will
happen in retail trade as well."