Financial Daily from THE HINDU group of publications
Saturday, Oct 29, 2005
Industry & Economy - Foreign Direct Investment
Bengal Govt vetting Wal-Mart proposal Govt favours FDI but not at the expense of local biz
Kolkata , Oct. 28
REPRESENTATIVES of the American retailing major WalMart, at a recent meeting with the West Bengal Chief Minister, Mr Buddhadeb Bhattacharjee, have expressed their eagerness to invest in the State.
However, unlike other investment proposals that are accepted readily, the Left Front Government has kept the multinational company waiting. According to Mr Bhattacharjee, a decision on the proposal is yet to be taken.
He was addressing members of the Indian Chamber of Commerce Thursday evening after presenting the Young Achievers Award to Mr Sanjiv Goenka, Vice-Chairman of the RPG Group.
According to him, the Left is not against Foreign Direct Investment (FDI). "We have no problems with FDI. We support it. I am trying my best to attract FDI because capital has no colour. I am ready to go anywhere for FDI," he said.
In this context, he said WalMart representatives told him they would take over the entire fresh foods markets in and around the city.
"I am not prepared at this moment to accept such a proposal. We will need some time to take a decision. I feel that Indian companies too can conduct such a business. Moreover, a large population earns a living as intermediaries between the farmers and the consumers," he said.
The Chief Minister has sought the views of the agricultural expert, Dr M.S. Swaminathan, on the role of retail majors in the distribution of food among consumers.
Talking about FDI in the retail business, he said the West Bengal Government had already accepted the proposal of the German major, Metro, who are into wholesale supplies to hotels.
"An Indonesian company also wants to build a three-storeyed shopping mall in Kolkata where they wish to sell only foreign goods. We are not against such a proposal," he added.
FDI in retail: Centre studying role of MNCs
Contradicting recent media reports, the Union Commerce Minister, Mr Kamal Nath, said the Union Government was neither in favour of nor against FDI in the retail sector. Instead, it was trying to work out a model where multinational retail companies could play a role.
He was talking to reporters Friday afternoon after addressing members of the Tea Association of India. According to him, the model would be based on the several studies that had already been conducted by different governmental agencies such as Planning Commission and ICRIER.
"We should not forget that 40 per cent of our fruit and vegetable production is wasted. So, we need investment to create cold chains and back-up logistics. Here is an area where FDI has a special role," he said.
When asked whether the Government would allow partial FDI in the retail sector to build the necessary backend infrastructure, he said nothing of that sort had been finalised.
According to him, the Government had spoken to all sections and stakeholders of the retail sector.
It was looking for incremental employment and was against any replacement of the existing employment opportunities.
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