(From left) Water resources minister Vijay Kumar Choudhary, chief minister Nitish Kumar and his deputy Sushil Kumar Modi at the Udyami Panchayat in Patna on Monday. Picture by Ashok Sinha

Patna, July 30: Chief minister Nitish Kumar today vehemently opposed foreign direct investment (FDI) in the retail sector, saying it was neither in the interest of farmers and retailers, nor consumers. But a farmer from his home district — Nalanda — favoured FDI.

Addressing the Udyami Panchayat in the state capital, Nitish said: “Lakhs of people would become jobless if FDI is introduced in the retail sector. These companies (retail giants) would start dictating terms once they capture the market. Then they would dictate price at which the consumers would have to buy products. The farmers would have to be content with whatever these companies offer them. It is an eyewash.”

But Rakesh Kumar, the farmer hailing from Nitish’s home district Nalanda, strongly advocated FDI in retail in Bihar. “FDI will benefit the farmers and our income will increase. At present, we are getting very little value for our products. Foreign companies will pay us better prices for our products,” he said, adding that the chief minister was opposing the move because he was not a farmer.

The chief minister was, however, not all impressed with the FDI idea. Nor did he like Centre’s stand that it was up to the states to decide if they wanted to implement the FDI in the retail sector.

Nitish said: “It is not possible at all because it cannot be seen in isolation. It is a national issue and it must have national response. These companies would start dictating their terms once they make their stronghold.”

Stating that Union commerce and industries minister Anand Sharma had written a letter to all the chief ministers to build a consensus on the issue of FDI in multi-brand, the chief minister said he had given “five-point rebuttal” on the issues raised in it. Nitish also stated in his reply that the FDI was not acceptable to Bihar.

“In view of the above (discussions in the letter), it is not possible for us to accept the FDI in the retail sector in our state. The Centre should reconsider its decision on the FDI policy,” Nitish said, responding to one of the entrepreneurs’ demand that FDI in retail should not be allowed as it would jeopardise the economy of the state.

In his rebuttal to Sharma’s letter on July 29, the chief minister said the argument that multi-national companies (MNCs) would modernise and transform the food chain was “nothing but half-truth”. “We must accept that the broad-based modernisation of the food supply chain in the country of our size cannot be brought about by MNCs driven by their narrow business interests,” Nitish said in the letter.

He also maintained that permitting FDI in this sector would displace unorganised retailers, leading to livelihood crisis. He also dismissed the theory that farmers would get better price for their products. Nitish maintained that the entry of MNCs would lead to single buyer for farmers. He has also questioned the logic that FDI in retail would lead to impetus to small-scale industries. Trade and industry bodies are sharply divided over the entry of FDI in retail in Bihar.

Siding up with Nitish, Bihar Chamber of Commerce president O.P. Sah said: “In Bihar, there should be FDI in infrastructure not retail sector. FDI in retail will not help consumers, traders or farmers. The MNCs will monopolise the market.”

In sharp contrast, industrialist Satyajit Kumar favoured FDI, at least selectively. “The market here is so large that MNCs will not be able to monopolise it. Besides, large Indian retail outlets like Big Bazaar are already there in Bihar,” he said.