FDI in retail will destroy livelihood of a large number: CPI(M)

A day after the government notified rules to permit FDI in retail, CPI(M) on Thursday charged the ruling coalition with taking the "single biggest step" to destroy the livelihood of a large number of people.

"By this policy announcement, Manmohan Singh government has taken the single biggest step of destroying the livelihood of the largest number of people engaged in retail trade in India," the CPI(M) Politburo said in a statement.

The government has gone ahead with the move "notwithstanding the widespread opposition" to FDI in multi- brand retail trade, the party said, adding it would wage struggles "to get this anti-national decision rescinded".

CPI(M) said the rules announced by the government were "designed to serve the interests of multinationals" like Wal-Mart, TESCO and Carrefour. The investment floor of USD 100 million or Rs 550 crore was "insignificant" for giant retailers like Wal-Mart which were multibillion dollar firms.

The restriction that foreign retail outlets should be in cities with over 10 lakh population was also irrelevant because "these are precisely the urban centres which the MNCs want to access as they are the most lucrative segment of the market," it said.

Furthermore, the rules provide that in states or Union Territories which do not have cities with a population of over 10 lakh, foreign retail outlets could be set up in cities of their choice, the party said.

"That the government is bent upon promoting FDI in retail at the cost of domestic interests is clear from the dilution of the conditions set for FDI in single-brand retail," it said, adding that the rule for MNCs to mandatorily source 30% of the value of products from small, village and cottage industries has been "diluted".

On the government's claim that the condition to make at least 50% of the investment in backend infrastructure would lead to more cold chains and other logistics, CPI(M) said global experience has shown that procurement by MNC retailers do not benefit farmers.

Over time, they receive depressed prices and find it difficult to meet the arbitrary quality standards, it said.

Launching an attack on Trinamool Congress withdrawing support to the UPA-II government, senior party leader Sitaram Yechury asked why did Mamata Banerjee's party oppose the bandh called by the Left to protest FDI in retail and other issues.

He said these developments clearly showed that a majority of the Lok Sabha members opposed the government's decisions to hike the diesel price, limit cooking gas cylinders to six per family per year, allow FDI in retail trade and carry out divestment of Navaratna public sector units.

"Hence, this UPA-II government has no legitimacy in implementing these measures" and must immediately roll them back, Yechury said in an editorial in the forthcoming issue of CPI(M) organ 'People's Democracy'.

Attacking Trinamool Congress, he said it had a history of withdrawing support from coalition governments.

"They were part of the RSS/BJP-led NDA coalition and government in 1998. With elections impending to the West Bengal Assembly in 2001, TMC withdrew support demanding the resignation of then Defence Minister George Fernandes over defence scams.

"Then TMC formed an alliance with Congress against the Left Front in West Bengal. The TMC-Congress alliance was routed in these elections. TMC then returned to NDA's fold notwithstanding the state-sponsored communal genocide in Gujarat," he said.

Yechury also said that TMC chief Mamata Banerjee had held the portfolio of Coal and Mines in 2004 and asked "does the current coal block allocation scam, as exposed by CAG, date back to this period?"