FDI will hamper small traders: Saugata

Last Updated: Mon, Feb 18, 2013 08:36 hrs

Veteran politician and former Union Minister Saugata Roy Sunday justified the opposition to the Foreign Direct Investments (FDI) in multi-brand retail, and said that the entry of consumer giants like, Walmart, Tesco and Carrefour will seriously hamper the businesses of small traders and small businessmen.

Roy addressing at the West Bengal Trade Convention-2013 organised by Confederation of West Bengal Trade Associations (CWBTA) said, "We know that in today´s globalized world foreign investment is necessary in many sectors, especially hi-tech sectors, but we - our party (TMC), our government - is totally opposed to FDI in multi-brand retail. We feel that the entry of consumer giants like, Walmart, Tesco and Carrefour will seriously hamper the businesses of small traders and small businessmen."

He said, "According to last census nearly 4 crore people in this country were employed in the retail trade and their businesses would be seriously affected once the big companies come in and the business and the style of this big foreign retailers is to, initially, buy dear and sell cheap so that they can wipe out competition and then they will buy cheap and sell dear."

"So we have opposed it but ultimately we could not stop it but there is a clause that it is up to the state government to decide whether they will allow every item in multi-brand retail and our state government is totally opposed. We shall not allow Walmart to set up business in Bengal harming the common traders."

Roy noted that he was asked by the West Bengal government to draft an Industrial Policy for the state, which he had already submitted to the Chief Minister.

"My emphasis is that West Bengal is a densely populated state and so we cannot have big ticket investments using a lot of land because especially in the fertile Gangetic plain, we cannot take away agricultural land to set up large industry."

"We have arid areas in West Midnapore, Bankura and Purulia like where big plants can be set up - like the Jindals are setting up their steel plant in Salboni or the industrial area in Kharagpur or in Raghunathpur in Purulia."

Roy commenting on the Singur issue said, "But the way the Tata´s factory was sought to be set up in a very, very fertile multi-crop area Singur was not correct."

He added, "I have told the Chief Minister in my draft (industrial policy) that we should emphasise on MSME, that is medium small and micro enterprises, because these are enterprises which employ more people and which generate more revenues for the government."

"Also the MSME sector does not require big investments as a result of which Bengal is ideally suited for MSME provided we can give the infrastructure necessary. There is land available with the West Bengal government in the industrial parks run by WBIDC and other state government organizations."

"Land is also available in the land reforms department which are vested lands these can be used to set up big industries, he asserted."

He said. "In my note I have also emphasised that in West Bengal it should be our effort to see that the sectors which are already there like jute, like tea, like some parts of heavy engineering - they should be encouraged - and we should now give emphasis to Tourism, which our Chief Minister is doing in a big way."

Roy said that West Bengal needs to lay emphasis on IT and IT-enabled services, bio-technology, which is a sunrise subject and where lot of employment can be given.

"So these are some suggestions the CM is in the process of finalizing a new industrial policy and I hope that she will be able to finalize the same soon. Given that, I have already given her a draft for the same."

"I have also suggested that in West Bengal we should have a Infrastructure Development Fund and a Infrastructure Development Corporation because infrastructure, as I have said, is very essential."

"West Bengal is now surplus in power. There is no problem as far as power is concerned, WB needs good roads for which we must find out ways of financing new roads. WB needs good social infrastructure, though in the past few years good hospitals have come up in the state, good hotels are coming up."

The minister asserted that in the New Town Rajarhat, there is a big boom, where the State government is trying to set up a financial hub. With all these infrastructure in position, West Bengal should be able to take a leap forward.

He pointed that if the Central Government really wants to pursue a Look East policy, then Kolkata and West Bengal are the ideal hub.

"They are closest to South East Asia. We share borders with Bangladesh, Nepal and Bhutan. China is not very far away if we take the Nathu La route and if the new highway through Myanmar, the Asian Highway, comes into being, Kolkata can again become the hub."

"Kolkata at one time and still is the hub of trade and business, especially retail and wholesale, in eastern India. We cater to Bihar, Assam, Orissa and all the North-Eastern states."

Taking about the economy of West Bengal, Roy said, "We have the burden of 2 lac three thousand crores of debts left by the previous Left Front government. And as you know on that amount of money, roughly, if you take a 10 percent annually pay an interest burden of Rs 20,000 crore."

"Now we have a salary burden of 40,000 crores; interest burden of 20,000 crores; how do we progress, how do we do industrial development. Which is why we had petitioned to centre to give us moratorium of 3 years on interest payment."

"The central government said that wait for the new Finance Commission but we want to emphasize that Bengal is the most debt-stressed state in India. This was acknowledged by the previous finance commission."

He said, "Our finance minister Amit Mitra is in conversation with the Union finance minister, Chidambaram and we hope, we do not want to go into a confrontation but we hope a solution which is equitable and just, will be ultimately worked out as far as West Bengal´s financial problems are concerned."

Taking about goods & services tax (GST), he said, "Now there is this talk of finalizing the goods & services tax (GST), recently there was meeting in Delhi, there is an empowered group of ministers headed by Bihar Dy Chief Minister, Sushil Modi, who are looking into this."

"We are not against GST but it must be made clear that the losses suffered by our state has to be wholly compensated because state as it is does not have many sources of revenue."

"Sales Tax which is now VAT is the main source of revenue, other than that we have taxes on motor vehicles, taxes on excise, we have stamp duty and we have tax on land revenue."

"These are the few sources so the elasticity of taxes, as far as the state is concerned, is very limited. So nothing should happen which should take away the state´s power or capacity to raise more taxes for the state because one has to remember the main responsibility is borne by the state, health is wholly borne by the state; education is wholly borne by the state."

"The West Bengal government pays the salaries of all teachers from KG to PG, from Universities to Primary schools, these are big burdens and sometimes I wonder how our finance minister Amit Mitra sleeps at night with this all these huge salary burden on his head."

"But he takes it with a smile and I am sure he will continue to steer our state towards greater prosperity in spite of all the difficulties."

More from Sify: