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General Secretary of FICCI, Rajeev Kumar has asked the government to allow FDI in all Mutli-Brand retail before the Budget session starts. On asking the following questions, Kumar answered:

Q: What is your view point on single brand retail? Do you think that it is a pioneer to the multi brand retail and can it be concluded that not everything is lost with regards to multi brand retail given that our government has at last recognised single brand retail.

A: Mr. Kumar strongly welcomed this and hoped that this is a pioneer to the multi-brand retail that is been finalized and executed soon after the elections in UP. With this the government indicates its path to reforms in the sector of retail trade, he said.

But with that, Kumar feels that if these reforms become unsettled for long, then there is requirement of the trade sector to be modernized. Looking forward to multi-brand retail becoming liberalized and the FDI being allowed earlier than the budget he hopes that this will increase investor interest in the sector.

Q: there is a big question on whether multi-brand retail will be done soon after the elections in UP or little longer after that? What would be the significance of notification of single-brand retail as a changer of frame of mind?

A: Kumar did not rate it very high as it was predicted long ago. He even said that it’s not that a major issue as well, since no stumbling blocks or political problems are visible here.

The drive that the multi-brand retail would move to sectors such as real estate sector or to the SMEs employment, because these do not exist with single brand retail. He agreed that it would be a positive step, but in terms of a change of the frame of mind, he believes that it is at a weak stage.

Q: Given a condition that you would go from 51% to 100% in single-brand retail also, still there is a compulsory sourcing requirement of 30% from medium as well as small enterprises. Politically saying, the idea of possibility of creating jobs is being sold, but are foreign investors really keen to invest in the condition?

A: Kumar is not certain about how the given situation would be met. He gave examples to compare the situation, of IKEA that continuously produces maximum of 50% of some of its Product lines from the medium and small enterprises and that of LV if it will have to produce 30% of its produce from SMEs. Kumar believes that this 30% is from India. all this seems difficult since some single brands have a very high quality requirement. Therefore, the situation and consequences are not very clear.

Q: DGCA, Over the last 48 hours, has clarified that the civil aviation sector is in trouble. A good dose of equity infusion is required by all these. Do you expect the government will push SEBI to increase its pace as far as the carve out is concerned, from the takeover code so that the proposal can move forward?

A:Kumar stated that the “Government will do this”. With a justification that the Given the condition of the civil aviation industry that requires good amount of liquidity infusion. He also said that he wished that the government really pushes SEBI so that an industry that has a potential of 20% growth rate can flourish and prosper.

Q: the Ministry of Finance is in the process of covering up the pre-budget consultations with its diverse stakeholders. Do you expect the 2012 budget to be something that India should be excited about or should it keep its expectations low?

A: Optimism and hope are the foundation of the industry. The country is need of a budget that is out of the box idea. It is not limited to statement of account, but also has reforms. The hope is that the budget will be a big bang budget as that is what is really going to change the mood.

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