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FDI In Retail – What Does the Government’s Own Data Say? Shankar Gopalakrishnan

Guest post by SHANKAR GOPALAKRISHNAN

In his budget speech, Finance Minister Pranab Mukherjee declared that the government’s “decision” to allow FDI in multi-brand retail outlets “has been held in abeyance” until there is a “broad based consensus.”  In other words, it’s already a decision, but it’s just being held back until the government feels it can go ahead safely.  The question though is: why is the government so convinced of its decision?  How does Mr. Mukherjee so firmly declare that “organised retail helps in reducing costs of intermediation… benefiting both consumers and producers”?  Has the government done the homework to justify its actions?  This note looks at the government’s own data to find out.

As far as is known, there was only one study commissioned by the government in this regard (Business Standard 2007)  This was done by ICRIER in 2007, first published as a Working Paper in 2008 (Joseph et al 2008), and subsequently converted into a book – Retail in India: A Critical Assessment – in 2009, with one chapter added by other authors.[i]

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