The new BJP government in Rajasthan on Friday night announced that it would
not allow FDI in multi-brand retail in the state as it would adversely affect various stakeholders and reduce jobs.
Rajasthan Chief Minister Vasundhara Raje
In a letter to Union Minister of Commerce and Industry,
Anand Sharma , Chief Minister Vasundhara Raje has said, "The state government studied the proposal and its ramification, and it is felt that permitting multi-brand retail would adversely affect various stakeholders."
Raje, in her letter to Sharma on January 25 (whose copy released to media today), said that the state government does not support FDI in multi-brand retail and would not be able to facilitate it.
"Retail trade, along with agriculture, is the largest generator of self-employment...Domestic retail primarily sources locally, whereas international retail sources globally, thus discouraging domestic manufacturing activity and hence reducing employment opportunities," she said.
International retail does not create additional retail jobs, it merely displaces existing jobs, she added.
"The initial low prices facilitated by the deep pockets of retailers results in eliminating competition and ultimately raising prices," she said.
"It is also a myth that FDI in retail leads to passing on the benefits to producers and farmers by removal of middlemen.
If needed middlemen are removed, which itself is doubtful, the benefits of eliminating them would go largely to the retailers, rather than to farmers or producers," the CM added.
Former Congress Chief Minister Ashok Gehlot had agreed to implement UPA government's decision to allow FDI in multi-brand retail.
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