The Hindu Business Line : Modern retailing can give fair deal to farmers, says Montek

"We will not be able to get over the present situation where the gap between what the consumer pays and what the producer gets is so large without modernising the trade mechanism," said Mr Montek Singh Ahluwalia, Deputy Chairman, Planning Commission.

Addressing the media on the sidelines of a seminar on `Corporate's role in rural development', organised by the Madras Management Association here, he said in an economy that grows at 9 per cent the total scale of the market is expanding. Existing small retailers can continue and at the same time the modern retailers can take the expansion.

The structural changes in an economy do mean that people re-deploy themselves.

"Nowhere in the world has small retailing disappeared. But, nowhere in the world has modern retailing not come in. So, I don't see why we should be any different," he said.

There is going to be room for modern retailing and there is going to be room for small retailing as well. There will be structural change that will take place.

Asked whether there is any need for a regulator, he said, "In my view, the best regulator here is competition. You should not have monopolies. If you are planning to let in modern retailer, you should let in more than one modern retailer."

Answering a question on whether multinational companies must be told to abide by the anti-pollution rules, he said this is the problem not only with multinational companies.

"From the environment point of view, all companies should follow the rules and the Government must enforce the rules on whichever company that is not following them.

"Certainly, in many parts of the country the failure on the industrial side to implement the necessary de-pollution measures is leading to a pollution of water sources, and that cannot be tolerated."

It is the responsibility of the Central and State Governments is not involved in this, he said. "So it's a matter of enforcing the anti-pollution laws."

New strategy

Explaining the new agricultural strategy the Planning Commission is working on, he said, "In the new strategy, we are going look at all possibilities — the roles of Central and State governments, farmers and research institutions. However, I think the corporate sector has an important role to play, and I hope that the new strategy will spell that out."

On power sector reforms, he said the Commission had produced an integrated energy policy report and hoped that the report's key recommendations would be implemented.

On the issue of free electricity to farmers, he said, "When you want to support poor farmers, which is a legitimate objective, there are many ways to do that," but observed that there are a lot of political constraints. The real problem is we are massively subsidising the electricity. Even if we want to subsidise farmers, there are better ways to do that."

Noting that he had discussed the issue with many Chief Ministers, he said he does not "expect to see any early reaction to good economic thinking."

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