Himachal Pradesh CPM advised state government to rethink over its decision to allow multi brand retail in state. In a letter to Chief Minister Virbhadra Singh, Tikender Singh Panwar, CMP leader and Shimla MC Deputy Mayor, asked not to allow this important sector being usurped by corporate giants.

Earlier, Consumer and civil supply minister GS Bali has announced to invite multi brand retail in Himachal Pradesh and he believes that it’ll help to stabilize prices in the retail market and will also increase employment opportunities in state. Panwar said that most of political parties has opposed FDI in retail and even in opposition during Atal Bihari government, Congress too had opposed vehemently.

CPM leader said that the Indian retail sector is the second largest employer in the country after agriculture. Even in the state of Himachal Pradesh it contributes in large scale employment, most of them are small unorganised or self-employed retailers. CPM feared that entry of MNC supermarket and hypermarket chains would cause severe displacement of these small and unorganised shopkeepers and traders. CPM believes that the entry of the giant Wal-Mart supermarket chain would have a disastrous impact. According to one estimate, a Wal-Mart supermarket would displace over 1300 small retail stores and render around 3900 persons jobless, Panwar added. In a situation when employment growth has slowed down according to the National Sample Survey data of 2009-10, the entry of foreign supermarkets would further aggravate the employment situation, Panwar feared.

Tikender Panwar said that the central government decision of FDI in multi-brand was designed to serve the interests of MNCs like Wal-Mart, TESCO and Carrefour. The investment floor of $ 100 million (R. 550 crore) is insignificant for the giant retailers like Wal-Mart which are multibillion companies. Furthermore, the rules provide that in states/Union Territories not having population of more than 10 lakh, foreign retail outlets may be set up in cities of their choice. Thus foreign supermarkets can be set up in all parts of the country and in a wider range of urban centres.

Panwar also rejected the claim, which is being cited in favour of FDI is that the condition for making at least 50 per cent of the investment in ‘backend’ infrastructure’ would lead to more cold chains and other logistics, benefiting the farmers. International experience has; however, shown that procurement by MNC retailers do not benefit the small farmers. Over time, they receive depressed prices and find it difficult to meet the arbitrary quality standards, Panwar quoted.

Tikender Panwar asked Virbhadra Singh not to open up the retail trade to FDI any further. He said that most of opposition parties are opposing it and in the absence of a wide ranging consensus, state shouldn’t proceed with the opening of this important livelihood sector for the loot of foreign MNCs.