Initiating the debate in the Lok Sabha on FDI in retail, the leader of Opposition said the government claim that foreign investment would benefit farmers, consumers and generate employment was a myth.
“The government has gone back on its promise of holding consultation with all stakeholders before allowing FDI in retail. It is sad that no effort was made to make a political consensus and no meeting or any consultation was held with even the main opposition party,” she said.
“International experience shows that retailers do predatory pricing, and once they come to India, they will reduce prices so that smaller shops get shut... and when the competition is over, they will raise prices and the consumers will have no option but to buy at high prices,” said Swaraj in a forceful speech.
Trashing the government’s assertion that foreign investment would put an end to middlemen, she said: “FDI in retail will not end the middlemen culture. There are instances like in sugar industry where there are no middlemen but still farmers have to struggle for sugarcane pricing.”
She quoted Punjab’s example saying Pepsi promised to buy potatoes and tomatoes from farmers, but backed out later.
Sushma Swaraj said FDI in retail would sound the death knell for small industries.
“Government says that foreign companies will have to take 30 per cent product from Indian small and medium enterprises, which means 70 per cent will be imported.”
“Can any industry be viable at 30 percent production? And 90 percent of the imported stuff will come from China and it will generate employment and growth in China, not India,” she said.
Retail FDI in favour of farmers, says Sibal
Defending FDI in multi-brand retail, Communications Minister Kapil Sibal said the move would benefit the farmers and accused the opposition of siding with middlemen. Sibal also argued that the debate was not needed and was just political in nature. “The purpose of the policy is that the farmer should get a higher price than he gets in the mandi (market),” he said. The minister cited the case of West Bengal, saying Pepsico there bought agricultural produce from 10,000 farmers.