FDI: BOON OR BANE FOR INDIAN ECONOMY
Retails Giants to Invest in India
The government on Friday won the vote in the Rajya Sabha on FDI in retail, two days after it sailed through the Lok Sabha, finally getting endorsement from Parliament for a policy seen as a major step forward in its reforms process. It got support from both the parties namely Samajwadi Party Bahujan Samaj Party ,the government won the day in the Rajya Sabha by 14 votes.OnThursday, day one of the debate on the issue in the Rajya Sabha, Mayawati had said in the House that 15 MPs from her party would be voting with thegovernment.Both the BSP and SP support the government from outside. The government’s victory on getting 51 percent foreign equity in multi-brand retail has long been a controversial issue. With this, global names like Carrefour, Tesco and Wal-Mart will set up stores in India. The sensex gained 75 points in early trade day on positivity that the government set to pass through FDI vote in the Rajya sabha.
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FDI policy with regard to Retailing in india
1. FDI up to 100% for cash and carry wholesale trading and export trading allowed under the automatic route. 2.
FDI up to 51 % with prior Government approval for retail trade of ̳Single Brand‘ products, 3. Small retailers will not be crowded out, but would strengthen market positions by turning innovative/contemporary 4. There will be initial and desirable displacement of middlemen involved in the supply chain of farm produce, but they are likely to be absorbed by increase in the food processing sector induced by organised retailing. 5. Innovative government measures could further mitigate adverse effects on small retailers and traders. However It may be noted FDI in retail is not a natural progression to showcase India as country devoid policy paralysis rather it is to shelter its efficacy’s resulting from plethora of scams that have made india and its...
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