| CII national council member Satyajit Kumar. Picture by Deepak Kumar |
Patna, Dec. 2: The Confederation of Indian Industry (CII) has expressed disappointment over Nitish Kumar’s opposition to the Centre’s decision of allowing foreign direct investment (FDI) in the multi-brand retail sector.
CII national council member and its eastern region vice-chairman, Satyajit Kumar, has written a letter to the chief minister, drawing his attention to the benefits that would accrue to the small and medium enterprises as well as to farmers and consumers once the retail sector is opened up.
“Your recent decision to oppose FDI in retail is a big disappointment for the SMEs entrepreneurs of Bihar. In Bihar, the retail sector is currently the second largest employers after agriculture and thereby it has the potential to be a part of a socio-economic transformation in the state,” says the letter.
The Centre’s proposal clearly says that those opening multi-brand retail shops would have to purchase 30 per cent of their stocks from SMEs. Explaining the SME point in detail, Kumar told The Telegraph: “Entry of just one big player like Big Bazaar has benefited about 70 SMEs of the state who are supplying their products to its outlet in Patna. It can be anybody’s guess what kind of benefits would accrue to this sector when a global player like Walmart enters the Bihar market.” He said Bihar was home to a little over one lakh SMEs which had a combined turnover of about Rs 7,000 crore. “These units don’t have the financial muscle to develop a network across the nation to set up a supply chain. Availability of local demand in the form of big players of retail sector would help these units. Moreover, growth in SMEs would also create more jobs in this sector,” added Satyajit.
The letter reminds Nitish about his recent visit to China where FDI in retail has been permitted. “Your recent visit to China where FDI in retail has benefited farmers, SMEs, youth and consumers, is a typical story to follow,” the letter says. It also talks about the provision in the proposed policy which would allow state governments to frame their own rules and regulations in which the benefits for farmers, unemployed, SMEs and consumers and interest of traders can be ensured.