India Inc wants BJP to reconsider stand on retail FDI

The Bhartiya Janata Party's (BJP) stance against foreign direct investment (FDI) in multi-brand retail seems to have not gone well with India Inc, which has sought a change of tone in the party's election manifesto.

However, the fear that the BJP's move may send a wrong signal to overseas investors has proved wrong with Walmart announcing plans to open 50 cash and carry stores in four - five years, a day after BJP released its manifesto.

Industry bodies, however, have welcomed BJP's promise to provide a thrust to job creation, tax reforms, growth revival and containing inflation.

"We welcome the openness to FDI linked to creation of assets and employment. Though we feel disappointed on the stand on FDI in multi-brand retail, we hold out hope for a possible review," FICCI president Sidharth Birla said.

The BJP manifesto, released on Monday, gives high priority to revival of growth and job creation but said no to FDI in multi-brand retail.

"We would continue to impress upon the BJP to reconsider its stand on FDI in multi-brand retail as the move will act as a multiplier effect on India's economy without impacting in any way the neighbourhood kirana stores," Assocham president Rana Kapoor said.

"It makes little sense to bar FDI from multi-brand retail since a decision to this effect has already been taken by the government and foreign investments lined up for it. The move, might send wrong signals to investors," PHD Chamber of Commerce president Sharad Jaipuria said.

The BJP has promised to set up a special fund for price stabilisation as also ensure fiscal discipline and pursue banking sector reforms to deal with rising bad loans.

"The BJP manifesto outlines multiple measures for inclusive development, with focus on governance, growth and employment. These are arguably the key concerns facing the economy today," Birla said.

The party promised to pursue a tax policy focusing on a non-adversarial and conducive tax environment, overhaul of the dispute resolution mechanisms and getting all state governments to adopt the Goods and Services Tax and incentives for investment.

"The BJP's focus in its election manifesto on giving a boost to economy, rationalising and simplification of taxation and restoring investor confidence would be a morale booster," Kapoor said.

The party's election manifesto accuses the Congress-led UPA government of creating 10 years of jobless growth and unleashing ''tax terrorism'' and ''uncertainty'', which not only creates anxiety amongst the business class and negatively impacts the investment climate, but also dents the image of the country."