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Traders’ association protest against government move to open retail sector to FDI

New Delhi, Oct. 23 (ANI): Traders associations on Tuesday protested against the government’s policy of allowing foreign supermarkets in India’s retail sector by burning an effigy of Ravana, the Hindu mythological demon king, in New Delhi.

Protesters came out on streets shouting anti government slogans and holding placards.

Praween Khandelwal, Secretary General of Confederation of All India Traders, said foreign direct investment (FDI) in the retail sector, would prove hazardous for traders as well as retail sector, and would affect the livelihood of millions of people.

“Traders, businessmen and labourers across the country have agreed to fact that foreign direct investment in retail sector is similar to a Hindu mythological demon king, Ravana and that would destroy the country’s retail sector. So today, we are burning the effigy of Ravana, which symbolises FDI not only in Delhi but over 100 cities across the country so that we can convey a message to federal government that opening of retail sector to foreign markets is not in benefit of the country and that it is a hazardous move for India’s economic condition and retail sector,” said Khandelwal.

The government announced that plans to allow FDI in its retail sector on September 14, a major economic reform that has been stalled for months by political gridlock and came as part of a package of measures aimed at reviving growth.

The move allows global firms such as Wal-Mart Stores to set up shop with a local partner and sell directly to consumers for the first time, which supporters say could transform India’s 450 billion dollar retail market and tame inflation.

Introduction of economic reforms in name of FDI had triggered nationwide protests by various political parties and businessmen community.

Khandelwal challenged the Manmohan Singh-led government to come forward for a debate.

Protesters threatened to intensify their agitation if government failed to rollback its decision, which seems to be unlikely.

“We have given an open challenge to federal government and I am repeating that through your medium that they should have an open debate with us and we will prove that foreign direct investment in retail sector was not in favour of the country but government has not accepted our challenge till now,” said Khandelwal.

The most high profile reform was to allow foreign supermarkets such as Wal-Mart Stores to set up shop in India for the first time – a move aimed at taming inflation but seen threatening the livelihoods of domestic retailers.

Despite the backlash, the government pressed ahead with more reforms slashing a tax on overseas borrowing by Indian firms, implementing a scheme to encourage individuals to invest in the stock market, and relaxing minimum requirements for the country’s airlines to fly overseas

Facing the threat of having its credit rating downgraded to junk, the Indian government has been running out of time to show it is serious about fixing an economy that has been hard-hit by a global economic crisis and political gridlock at home.

Foreign retailers will have to source almost a third of their manufactured and processed goods from industries with a total plant and machinery investment of less than $1 million. Supermarket chains will certify compliance with this themselves.

The government will reserve the first right to procure food produce from farmers before companies do, in order to provide stocks for its food subsidy schemes for poor households.

Individual state governments will decide whether to allow foreign supermarket chains to enter. The Congress party-led government hopes this will take the sting out of opposition from regional parties who say the policy will destroy jobs.

India’s inability in the past months to push through major reforms and ease its subsidy burden as growth slowed sharply has put it in danger of becoming the first of the big ‘BRICS’ emerging economies to see its credit rating downgraded to junk.

Prime Minister Singh was credited as the economist who opened up India’s economy in the 1990s, but since taking office eight years ago he has repeatedly put off or rolled back difficult economic decisions.

Singh will need resolve and the support of powerful Congress party boss Sonia Gandhi if he is to muster the political will to fight off a wave of protests from both political allies and the opposition over reforms seen as costing jobs and raising prices. (ANI)