Monday, December 31, 2007

‘Formula’ to red-carpet retail firms

‘Formula’ to red-carpet retail firms

Calcutta, Dec. 28: The government is trying to work out a formula to allow big Indian companies to enter the farm retail business in Bengal, Buddhadeb Bhattacharjee said today.

At the annual general meeting of the Bengal Chamber of Commerce and Industry, the chief minister stressed the need to move “very cautiously and slowly” while iterating his government’s stand — that Indian retailers “must be” allowed to run their business.

The remark comes at a time when corporate giants Reliance and RPG Enterprises are finding it tough to do business in Bengal because of violent opposition from a partner in the ruling Left Front, the Forward Bloc, and the Trinamul Congress.

The chief minister admitted that the “modern market mechanism” the big retailers would bring in could lead to job loss. But he also underscored the need for big companies to strengthen the supply chain mechanism.

A cautious approach would be taken, balancing the potential of loss of jobs on one side and the development of agriculture on the other, Bhattacharjee said without elaborating further.

Housing minister Gautam Deb had last week spelt out what could be the likely contour of such a formula.

He said the state government wanted restrictions on Indian retailers and a complete bar on foreign investment in the sector.

In case markets are developed in joint venture with private companies — as Reliance would be doing in Park Circus with the Calcutta Municipal Corporation — a bigger space would be retained for small retailers and traders than it is done now.

The government would also facilitate bank loans for traders and retailers to tide over the transition period, Deb said, adding that the new markets would be developed without harming the interests of small traders.

The chief minister today argued that a modern market mechanism, which involves sophisticated storage facilities, were essential to sustain and develop agriculture in the state. “Over 30 per cent of our agricultural produce perish in the fields. This cannot go on,” he said.

He also pointed out that old methods of selling — like vegetable on pushcarts — would die soon.

But he repeatedly stressed the virtue of moving “slowly and cautiously”.

“There are so many vegetable markets in and around the city. In case big retailers come, many people could lose jobs and that will complicate (the) unemployment problem. We don’t want that. But we need the market mechanism also.”

The words could be music to the ears of companies like Reliance which have not been able to roll out shops here. Many of the companies were hopeful that the political situation would become favourable after the rural polls in 2008.