Calcutta, July 7: Kaushik Basu, the chief economic adviser to the Union finance ministry, has said Mamata Banerjee is an “intelligent” leader and would understand the benefits of foreign direct investment in retail if they were explained to her.
“When it comes to some of the intricate economic policy making, it is easy to fall in the trap of thinking that ‘I know what is best’,” Basu said in response to a question by a reporter at an event organised by the Bharat Chamber of Commerce today in Calcutta.
“I also feel that many of our top leaders... and I feel that the chief minister of Bengal also falls in that category; they have a lot of intelligence to grasp intuitively this kind of a policy. So, if it can be explained to them, I feel that she would understand it is actually in the interest of the farmers of Bengal and the consumers of Bengal,” Basu said, adding that he hoped “she will come along”.
Hours later, asked about Basu’s observations, Mamata said in Barasat: “We don’t want FDI in the retail market. We won’t allow it to happen in our country. We had said so in our manifesto. Unlike other parties, we don’t say one thing and do another.”
Few were expecting Mamata to drop her opposition within hours of an economist making a point.
Basu’s comments come at a time the Centre has revived efforts to breathe life into the FDI decision that has been shelved under pressure from Mamata. The renewed thrust on notifying the cabinet decision to allow FDI in multi-brand retail is expected to become more pronounced after the presidential polls.
The Centre is expected to contend that states whose governments are opposed to FDI can disallow such projects as local permits are needed for such operations while those who want foreign investment can clear proposals with safeguards.
Known for his plainspeak, Basu, who is expected to get more room for manoeuvre in the ministry now being steered by Prime Minister Manmohan Singh, added: “When the retail giants come in, it is not a group of charity that is coming in. They are coming in for profits. If strict conditions are set, they will not come. So, our objective will be to devise a proper regulatory mechanism.”
Kaushik Basu in Calcutta on Saturday. Picture by Kishor Roy Chowdhury
Basu also referred to the interests of farmers, citing which Mamata has been opposing FDI in retail. “They (the retail chains) will be operating on a large scale… and will be competing with one another. So the farmers will get better prices as demand goes up,” he added.
Basu did not cite any definite timeline within which the Centre is hoping to allow FDI in multi-brand retail.
But the department of industrial policy and promotion has begun wider consultations with stakeholders, including farmers, consumers and the food processing industry.
Commerce minister Anand Sharma has written to political leaders to push the case. The chief ministers of several Congress-ruled states have supported the initiative but many others, including Mamata, remain opposed to the plan.