Kaushik Basu favours autonomy to states on retail FDI

"Some scepticism about any policy is worth it, every policy comes with a negative effect. You have to distinguish between every form of FDI and you have to look at each one in some detail. FDI in retail, I personally feel, will have some negative effect, but the positive effects are far greater, so it is worth going into it," Basu told reporters at 'Indian Finance Conference' at IIM-Calcutta here.

The former chief economic advisor to the finance ministry said he was in favour of giving autonomy to the states on deciding if they wanted 51 percent FDI in multi-brand retail as it would be a kind of "a laboratory experiment" in the next few years on whether the reform was worthwhile or not.

 

"I understand different states take different views on it and are hesitant. Once you allow the states to take their own views, you could get almost a laboratory experiment... In a few years, we will see whether the states allowing FDI are doing well or badly.

"If we see that they are doing well, then presumably, states that were hesitant earlier will open up. If we see that they are doing badly, then that would be a lesson for everyone," he said.