By IANS
New Delhi : Commerce Minister Kamal Nath ruled out any immediate re-look at the current foreign investment policy on retail trade that restricts the entry for global chains in the country.
“A study on retail is underway and the report is still awaited,” Kamal Nath told reporters at a seminar on rural retail, referring to the study being conducted by the Indian Council for Research on International Economic Relations (Icrier).
The government currently permits up to 50 percent foreign equity in the retail trade industry for single-brand chains. It also permits 100 percent foreign equity in cash-and-carry wholesale trade.
As per estimates of various global consultancies, India’s retail trade industry is projected to double to around $425 billion by 2010 and to have a size of $625 billion by 2015.
Kamal Nath had said Saturday that he hoped to place a note on foreign investment policy before the cabinet in 10 days, adding that the country needed a policy that would not disturb livelihoods or displace people.
At the seminar, the commerce minister asked commercial banks to revamp their rural credit strategy so that it directly benefits farmers, keeping in mind the theme of inclusive growth, where fruits of development get broad-based.
“Banks should make money but the fact is that a farmer’s desire to repay loans is not backed by his ability,” Kamal Nath said, adding the net gains made by an Indian farmer just goes towards repayment of loans and interest.
He said this vicious circle where the farmer gets sucked into a system of paying interests and loans, despite being productive, must come to an end. Only then can rural growth be enhanced, and in turn support urban growth, he added.
He said the corporate sector must be associated in these matters and suggested that one way to link up with rural enterprises was through the development of tourist spots and heritage sites.
While private sector involvement in developing and maintaining tourist places was important, backward linkages that could result from such engagement in the form of development of art and craft was no less valuable, he added.