India's retail sector that has been anticipating some good news on allowing FDI in the multi -brand segment is left disappointed by Finance Minister Pranab Mukherjee, who made no mention of it in his Budget speech.
"The Budget looks like a 'khatta' Budget. Although it has a lot of announcements on GST, DTC, UID, it has very little to show for the retail.
"As expected, retail FDI was given a miss, although the trailer (Economic Survey), highlighted the positive impact of FDI in retail," Shoppers Stop Customer Care Associate and Managing Director Govind Shrikhande said.
The Economic Survey released last week had favoured a phased opening of foreign direct investments in multi-brand retail saying it could help address concerns of consumers and farmers, besides bringing in technical know-how.
Last year also, the retailer had hopes of policy relaxation in the FDI policy for the sector, which, however, remained unfulfilled.
At present 100% FDI is allowed in cash and carry wholesale trading, while it is prohibited in multi-brand retail. Up to 51% FDI has been allowed in single-brand retail since 2006.
"This (budget) was the best opportunity for the government to make any announcements related to FDI relaxation in retail but it is extremely disappointing to see that nothing was mentioned," Ficci Director (Retail and Consumer Goods) Sameer Barde told PTI.
The government had looked receptive to the idea (FDI in retail), but given the fact that no news has come today means that there is still some problem, most likely political, he said.
"We can only hope for something to happen within this session of the Parliament," he added.
Echoing similar sentiments, Aditya Birla Retail CEO Thomas Varghese said: "The government has been playing very safe in case of the FDI issue. It is already under pressure and has several bills to be passed going ahead, so it does not want to take up the FDI in retail issue right now."
Global retail giants such as Wal Mart, Carrefour and Tesco have been pitching for opening FDI in multi-brand retail to tap the immense potential this country offers. Wal Mart India spokesperson declined to comment.
However, Future Group Chief Kishore Biyani said the government is recognising what the modern retail players have been saying in the past.
"The announcements made to strengthen the farm sector, cold chain investments and recommendations to amend the Agriculture Produce Marketing Committee (APMC) Act are all indicative of the government's will. All the measures announced today are a precursor of things to come," he said.
