FDI option for small cities too

The government has decided to make FDI in multi-brand retail possible even in cities with a population under one million, a move that is set to bring many smaller cities under the FDI-in-retail ambit. This came out in Commerce & Industry Minister Anand Sharma's reply to the debate in the Lok Sabha Wednesday.

The government's FDI move was earlier envisaged to have involved the million-population cap, which would have meant only 53 cities would have qualified out of nearly 8,000 towns and cities in the country. After some states like Jammu & Kashmir and Assam, said the Commerce & Industry Minister, took it up with Prime Minister Manmohan Singh that they would not be able to avail themselves of the policy as no cities there have a population over that benchmark, the government decided to adopt a flexible approach allowing such states some discretion in fixing the population cap.

"The agrarian and food-producing states that do not have cities with a 10 lakh population, such as Jammu & Kashmir, Assam, Uttarakhand, Manipur, et al, can change the critiera," Anand Sharma told The Indian Express. Asked whether states like Maharashtra, which have cities with one million population, could also be allowed to open such retail outlets, the Commerce & Industry Minister said, "If they write to us seeking such flexibility, it can be done. It is not such a rigid rule."

As per the policy envisaged earlier, only 18 of the 53 cities with a million-or-over population could have FDI in multi-brand retail, going by the number of state governments that are in favour of the policy. Earlier, the Centre had written to all chief ministers seeking their views on allowing FDI in multi-brand retail. Out of 21 states that responded, 11 supported it, 7 opposed it and three asked for further clarifications. Incidentally, the Centre has not got anything in writing on this issue from BJP-ruled states including Gujarat and Himachal Pradesh.

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