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TMC passes resolution against domestic capital and retail FDI

BS Reporters  |  Kolkata 

The ruling Trinamool Congress (TMC) in West Bengal on Thursday introduced a resolution in the Assembly opposing not only foreign investment, but entry of large domestic capital in the retail sector, in a bid to reach out to its political constituency.

Opening the door for large investors in retail businesses and raising diesel price, which will affect farmers and small and medium enterprises, should be checked, the resolution said. Also, entry of multinational corporations in agriculture and consumer segment should be checked, it added.

The resolution, however, would not culminate into any legislation, said Firhad Hakim, minister in charge, municipal affairs and urban development. Neither would domestic retail players be subjected to cancellation of licences, Partha Chatterjee, industry minister, clarified.

Unless there is a change in law, there would be no impact on retailers operating in Bengal, a lawyer said. That was apparent from the administration’s statements as well. “Nothing will happen to Reliance Fresh, Pantaloon, Big Bazaar or Spencers, as they operate in malls mostly,” Chatterjee said.

West Bengal is yet to amend the Agricultural Produce Marketing Committee (APMC) Act and retailers need a licence to operate. Though a mere political statement, the Trinamool Congress drew a distinction between standalone retailers and those operating in malls.

Corporate entities, including, Pepsico, which sources raw materials such as potatoes through contact farming in the state, would not be affected by the resolution.

The operations of the sole foreign retail operator in Kolkata, German wholesale retail giant Metro Cash & Carry, would not be impacted, as the state does not want to disturb the set-up of existing retailers, Hakim said. “Not all resolutions result in definite action. This is to spread consciousness against FDI in retail.”

The state does not have any power to have a legislation blocking the entry of FDI in retail. We would like to spread consciousness among other states to pass similar resolution,” said Hakim.

The move is more of a protest against the Centre’s move to allow FDI in multi-retail, over which TMC withdrew support from UPA-II.

Interestingly, TMC had introduced a similar resolution in 2007 in the Assembly, but it was jointly defeated by the Left and the Congress.

On Thursday, however, the Left Front staged a walk-out from the Assembly over amendments to the resolution that were not incorporated, while the Congress opposed it.

The industry understands that it’s rhetoric. “I don’t think it will translate into anything. It’s just a resolution,” a Kolkata-based industrialist in the retail space said. Some others were completely clueless about the impact and the necessity to pass such a resolution.

“As far as the resolution is concerned, there are advantages and disadvantages. She was trying to take a socialist decision to save the jobs of 10 million people, who are dependent on 1,70,000 shops in the state. As the Centre says, had they gone for it, it would have been useful for farmers,” Venugopal Dhoot, chairman and managing director of Videocon Group, said.

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First Published: Fri, September 28 2012. 01:00 IST
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