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The Planning Commission on Tuesday said the government does not hold the view that FDI in multi-brand retail is necessary to control the price rise.
“I don’t think that it is government’s view that the present inflation cannot be brought under control without FDI in multi-brand retail. We can bring inflation under control,” Planning Commission Deputy Chairman Mr Montek Singh Ahluwalia said. He was speaking at the Annual General Meeting of industry body Ficci here.
The government has been toying with the idea of opening the sector for foreign direct investment (FDI).
The industry ministry’s discussion paper on liberalising the multi-brand retail argues that foreign investment in the sector could help tame inflation.
Permitting foreign investment in food-based retailing is likely to ensure adequate flow of capital into the country and its productive use, in a manner likely to promote the welfare of all sections of society, particularly farmers and consumers, the paper said.
At present 100 per cent FDI is allowed in cash and carry wholesale trading, while it is prohibited in multi-brand retail. Up to 51 per cent FDI has been allowed in single-brand retail since 2006.
“Government is not ruling out FDI in multi-brand retail. We have said that it is a sensitive area. Many ministries have supported it. This is viewed as sensitive area,” Mr Ahluwalia said.
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