Chennai, Oct 20 (ANI): Minister of State for Parliamentary Affairs V Narayanasamy today said the recently introduced retail reforms will create 20 million jobs and will provide an impetus to the economy of the country.
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 retail market and tame inflation.
These reforms, the government claims are crucial to revive India's flagging economic growth, reining in a bloated fiscal deficit and warding off the spectre of a credit rating downgrade.
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
Narayanasamy said that apart from creating employment, facilities of cold storage would help to store the vegetables and food grains in a big way.
"Bringing this scheme is mainly for the purpose of attracting foreign investment in a big way. The country needs investment, then only the economy will grow and apart from that, we found that by bringing this scheme, the farmers will also benefit from the point of view that they will get a good price for their produce.
"Certainly a lot of cold storage chains will come, which will be able to cater to the need of storing the vegetable, foods and food grains in a big way. Today, more than 35 percent of our agriculture produce, fruits and vegetables are totally discarded because we do not have a cold storage facility that will be taken care of in a big way. When this FDI in retail will come in our country, more than 2 crore Indian people will get employment in the chain of the stores," said Narayanasamy.
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.
Recently, the Supreme Court had asked the government to amend the Foreign Exchange Management Act (FEMA) regulations in order to implement FDI in retail.
Media reports state that the federal government has now asked the RBI to make required amendments by November 03 as per the two weeks notice.
However, the government while declaring the FDI in retail sector said that state governments would have the liberty to 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. (ANI)