The Tribune, Chandigarh, India

	FDI in retail: Important rider missing in final policy Sanjeev Sharma Tribune News Service New Delhi, December 1 Although the government announced several riders for entry of foreign players in the retail sector there was one safeguard condition pertaining to the impact on small retailers which was discussed but did not find a place in the final policy announcement. It was proposed to stipulate a condition of setting up wholesale cash and carry outlets with FDI to sell mainly to small retailers which could ensure integration of small retailers into the supply chain. The safeguard for small retailers was that 30 per cent of the sales turnover of the players entering multi-brand retail should be made to small retailers, either directly or through wholesale cash and carry units set up for this purpose. This rider was discussed at inter-ministerial consultations on the FDI in retail proposal moved by Industry Ministry but is absent from the final policy. Given the fact that most of the opposition now on FDI in retail is revolving around the perceived threat to small retailers and shopkeepers, this safeguard could have assuaged these concerns and softened the attack on the policy. Retailers called a bandh today to protest against the policy and Parliament is facing a deadlock over the issue. During the consultations, various government departments had deliberated on the impact of small retailers of this policy. It was also suggested that state governments may put conditions for integrating the small retailers and kirana merchants in the value chain. One major reason why the policy was unfolded in larger cities and urban agglomerations with population of more than 10 lakh was also the concern of the small retailers. During the deliberations a view was, “While it is desirable to find means of integrating the small retailers into the upgraded value chain and providing them access to the logistics and supply chain set up by the FDI-funded retailers, this may be difficult to implement in practice. Further, the impact on the small retailers would vary from location to location. It has been proposed that the FDI policy is initially unfolded in larger cities and urban agglomerations”. Most of the other conditions that were discussed have been included in the final policy. During the consultation process, the view was that the policy should be rolled out in a calibrated manner. Already, the policy has a safeguard for the other section, small manufacturers who may be hit by opening of retail and threat of cheap manufacturing imports flooding the country. The policy stipulates that 30 per cent of sourcing of manufacturing products will be from small and medium enterprises. Among the major conditions, FDI has been restricted to 51 per cent. The minimum FDI to be brought in into a project would be $100 million. The deliberations noted that state governments are best placed to assess the impact of this measure on small retailers, as also to take measures to mitigate any impact. Front-end retail outlets will be set up only in states where the states agree to allow FDI in retail under this policy. At least 50 per cent of the total FDI proposed by an investor should be in back-end infrastructure.
	All stakeholders were consulted on FDI, says Montek New Delhi, December 1 Planning Commission Deputy Chairman Montek Singh Ahluwalia has said the government has consulted all stakeholders, including UPA allies, before opening the multi-brand retail to foreign investment. "This is one of the most open decisions with the most enormous amounts of consultation. It almost has been going for a year. I do not think anyone was in any doubt that this was happening and it is coming to the Cabinet and the Cabinet will decide," he said in an interview to Karan Thapar for the programme 'India Tonight' on CNBC TV-18. Responding to the criticism that the UPA allies were not taken on board, Ahluwalia said, "...this is not a case that allies were not aware of. In some cases, actual consultation took place." On objections being raised by states on allowing FDI in retail, he said, "It gives them a veto. We should not let any one state veto the developments for the country on a whole. There are states that are keen to do it. The Chief Minister of Punjab said this would be very good for farmers. There are many others those who have the same view." Given the response the decision has evoked from states, he said multinational companies would be able to set up stores in about 20 cities. "The calibration is whichever state wants to do it, can do it. The total number of cities is a little over 50 (with over 1 million population), and half of the states have sort of said no, which has reduced the number to 20," he said. — PTI
	Food inflation at 4-month low New Delhi, December 1 Food inflation dropped to a four-month low of 8 per cent as on November 19, reflecting fall in prices of essential items like onions, potatoes and wheat giving relief to common man, while rates for rice and vegetables increased at a moderate pace. Decline in food inflation may also give respite to the government which is facing heat from the Opposition on various issues, including the price rise. This is lowest since July 16 when it was 7.16 per cent. Food inflation was 9.01 per cent in the previous week ended November 12. It stood at 9.03 per cent in the period in the previous year, corresponding to the week-ended November 19, 2011. A relieved Finance Minister Pranab Mukherjee said, "If this trend continues, perhaps we may have the year-end inflation at around 6-7 per cent." — PTI
	Exports up 11% in Oct, lowest in 2 yrs New Delhi, December 1 India's exports grew by just 10.8 per cent to $19.8 billion in October, the lowest in the last two years, mainly due to the declining demand in the US and Europe. The growth rate has been the lowest since October, 2009, when it contracted by 6.6 per cent. Imports grew at a faster rate of 21.7 per cent to $39.5 billion leaving a trade deficit of $19.6 billion, the highest ever in any month in the last four years, which is also due to expensive crude oils and vegetable oils,according to the Commerce Ministry data released today. From a peak of 82 per cent in July, export growth has slipped to 44.25 per cent in August, 36.36 per cent in September and 10.8 per cent in October. In October, oil imports grew by 20.73 per cent to $10 billion. Whereas the non-oil imports rose by 22 per cent to $29.4 billion over the year-ago period. But, for the cumulative April-October period, exports aggregated to $179.7 billion showing a handsome growth of 45.9 per cent, thanks to sterling trend witnessed in the previous months of the current fiscal. A steady rise of 30.9 per cent in imports for the seven-month period to $273.4 billion has left trade gap widening to $93.7 billion. Commerce Secretary Rahul Khullar has expressed concerns over the increasing balance of trade and said that at this rate, it may breach $150 billion mark during 2011-12. — PTI
	Re stronger by 74 paise Mumbai, December 1 The rupee rose to nearly two-week high of 51.46/47 against the US dollar by gaining a smart 74 paise, buoyed by the rally in local stocks and expectations of more capital inflows. The last time the local currency made a similar big gain was on on October 28, 2011, when it jumped by 74 paise. Fresh dollar selling by exporters on expectations of fall in dollar's value overseas too boosted the rupee sentiment, forex dealers said. At the Interbank Foreign Exchange (Forex) market, the rupee opened strong at 51.84/85 a dollar. It further improved continuously in line with strong local equities. It touched a a high of 51.40 before closing at 51.46/47, up 1.42 per cent. — PTI
	Maruti sales decline for 6th month in a row Honda reports lowest-ever sales due to floods in Thailand Tribune News Service New Delhi, December 1 Country's largest car-maker Maruti Suzuki India Ltd (MSIL) has reported a drop in sales for the sixth consecutive month in November as another Japanese car-maker, Honda Siel Cars India (HSCI) faced fall in sales as a result of its production being affected due to the floods in Thailand. While MSIL today reported a 18.46 per cent decline in sales to 91,772 units, HSCI said in the wake of the recent floods in Thailand , Honda is operating with severe production constraints since the beginning of November 2011, impacting its monthly sales. It reported a total sales of just 1,982 units, the lowest ever since its entry into the country. MSIL had sold 1,12,554 units in the same month last year, which was among the highest sales ever achieved by it. It recorded a sales of 82,870 units in the domestic market last month, a 19.15 per cent fall from 1,02,503 units in November, 2010. However, Japanese car-maker Nissan riding high on the response to the recently launched sedan Sunny reported a sales of 2,688 units in November in comparison to 1,079 units sold in the same month last year reflecting a jump of 149 per cent. The company said Sunny had received 3,130 bookings since its launch in September this year. Toyota Kirloskar Motor reported an over two-fold increase in sales to 13,956 units in November 2011, driven by robust demand for its latest ‘Etios’ and ‘Liva’ models. The company had sold 5,242 units in the corresponding month last year. Tata Motors reported an increase of 44 per cent in its domestic sales for November at 72,474 units from 50,419 units it sold in the like period of last year. The company's total sales including exports in the month under review rose by 41 per cent at 76,823 units over November 2010. Ford's India reported an increase of 11 per cent in its domestic sales for the month of November at 8,322 units from 7,504 units in the like period of last year. Price hike likely in January Maruti Suzuki India is considering to hike prices of its products next month to offset the impact of rupee depreciation. "Considering the amount of pressure that we are having on our margins due to currency fluctuations, we have to do something. We are looking at a price hike in January," Maruti Suzuki India Managing Executive Officer (Marketing and Sales) Mayank Pareek said. — PTI
	VRS for BSNL staff on cards Tribune News Service New Delhi, December 1 State-owned BSNL has proposed a voluntary retirement scheme (VRS) to the Telecom Ministry for employees who have completed the age of 45 years and have served on a regular basis for 15 years. Giving details of the proposal sent by the BSNL, Minister of State for Communications and IT Milind Deora in a written reply in Parliament said as per the proposal, the employees, who will avail the VRS, would get an ex gratia amount of 60 days salary (basic plus dearness allowance) for each completed year of service, or salary for the number of months left in the service, whichever is less. However, the compensation would be subject to the maximum of 60 months salary. This would be in addition to the normal retirement benefits. The VRS has been under discussion since 2009 when a panel headed by Sam Pitroda, adviser to the Prime Minister on Public Information Infrastructure and Innovations, advocated that BSNL take the VRS route to prune its nearly 2.77 lakh strong workforce by a third. Deora said, the likely expenditure on ex gratia for approximately 1 lakh employees is estimated to be about Rs 11,276 crore. In addition, there will be expenditure on normal retirement benefits, including gratuity, pension, leave encashment and transfer grant. BSNL had consultations with its executive association and staff union in this regard. BSNL has reported that the majority of associations have opposed the scheme or expressed their reservations, he added. "The proposal is under examination in the Department of Telecom," Deora said. BSNL had registered a net loss of Rs 1,823 crore during 2009-10. Besides, BSNL has Rs 5,475.73 crore as the outstanding dues from the customers at the end of three years and for the current year as on September 30, 2011 in respect of wired and wireless mobile services and circuits, Deora said.
	MCX launches gold futures product Tribune News Service New Delhi, December 1 Multi Commodity Exchange of India Ltd (MCX) has launched a new gold futures product to cater to the markets in North India. The Gold Petal - New Delhi contract has been launched with an aim to cater to the needs of the small traders and retail participants based in North India. MCX launched Gold Petal-Mumbai contract in April 2011, and has witnessed an average daily turnover of Rs 33.38 crore since launch. It witnessed a highest daily turnover of Rs 125.82 crore on November 9. The total value of commodity futures contracts traded on MCX in the six months ended September 30, 2011, was Rs 81,391.47 billion, which represented a market share of 87.9 per cent of the Indian commodity futures industry.