2-tier panel to smoothen FDI ride

The development comes as the issue of FDI in multi-brand retail continues to divide political parties

The government is looking at setting up a two-tier panel to streamline internal trade for unleashing benefits of foreign direct investment in multi-brand retail.

The first one will be an inter-ministerial tier to be headed by Consumer Affairs Minister K V Thomas. It would have Finance Minister P Chidambarm, Agriculture Minister Sharad Pawar, Commerce & Industry Minister Anand Sharma and Corporate Affairs Minister Sachin Pilot, among others.

Select ministers in charge of consumer affairs from states and industry representatives will also be part of this group.

The second tier will be formed at the bureaucratic level, where secretaries of all departments concerned will be members.

The committee will review tax spread between states, the Shops and Establishments Acts and integrated logistics hubs for reforming the country’s internal trade structure.

The development comes as the issue of foreign direct investment in multi-brand retail continues to divide political parties.

Officials said the committee would suggest measures to smoothen internal trade which would enable full unlocking of the economic benefits of FDI in multi-brand retail.

The Cabinet, while clearing a proposal to allow up to 51 per cent FDI in multi-brand retail in September 2012, had directed a high-level group under Thomas to examine internal trade-related issues and suggest remedial measures.

Last week, Thomas said that the inter-ministerial panel on internal trade reforms would be set up soon. He also discussed the matter with Prime Minister Manmohan Singh.

According to officials, the Consumer Affairs Department, for the time being, has identified strengthening the Essential Commodities Act, a mechanism outside the municipal limits, to facilitate smooth flow of traffic and reforms in Agriculture Produce Marketing Committee (APMC) Act, a mechanism to bring farmers, processors, retailers closer and link agriculture production to market and consuming centres.

Strengthening the spot exchanges and improving transparency in trading and storage of essential commodities are some of the other broad issues which the high-powered committee is expected to deliberate upon. “The issues flagged on internal trade and composition of the panel to examine those has been floated for comments by other ministries concerned with FDI in multi-brand retail, and once all the details are available, the agenda could be altered,” said a senior government official.