Retail FDI to control wastage: Rakesh Bharti Mittal

Written By Unknown on Jumat, 04 Januari 2013 | 08.11

Over the past few months and especially since P Chidambaram took over as finance minister, there has been renewed optimism about India's growth prospects. This optimism has come on the back of the government's recent reform measures hoping to boost investment in the country and kick start in the economy.

In an interview to CNBC-TV18, Rakesh Bharti Mittal, vice chairman and managing director of Bharti Enterprises and chairman, CII National Council on Agriculture speaks about the recent reforms.

Also read: Big bang FDI reforms likely to spur investments in 2013

Below is the edited transcript of his interview on CNBC-TV18.

Q: Is 2013 going to be a better year? We have seen some big ticket policy decisions being taken by the government—foreign direct investment (FDI) in multi-brand retail. Even though that decision has actually been taken, we haven't really seen too much activity on the ground. I understand that retail global giants will need to assess and revaluate India's opportunity carefully before they put any money. In your case, you have an existing joint venture, Wal-Mart still hasn't applied yet for a multi-brand licence. Are we really seeing things turnaround?

A: I must compliment the Government of India and the minister Anand Sharma for having delivered the policy of FDI in multi-brand retail. That was very much required. To my mind this is not only just getting the investment into the sector, but, more importantly, looking at meeting the requirements from end to end, right from the farmer's level on the farming side to the consumer on the consumption side.

I believe until and unless we have large scale multi-brand retail formats rolling out in the country, investments in cold chain will not come. The policy clearly stipulates that the money has to be set aside for setting up the cold chains, supply chain logistics. To my mind that is going to be a great game changer for two reasons. One, the perishable produce will move in very hygienic and controlled temperature conditions thereby reducing the wastages. In a way, this will help us in containing inflation. It's been left to the state governments to take this forward.

Q: There continues to be a regulatory overhang on multi-brand in retail because the state government's approval is needed. A majority of states have actually said no to FDI in multi brand retail as of today. Your joint venture partner Wal-Mart has not yet begun the process of actually operationalising multi-brand retail. So, is there still the continued sense of regulatory overhang as far as retail is concerned?

A: I wouldn't say that. We are preparing for doing the needful. It will take some time. Our partners, Wal-Mart are studying the entire policy in its entirety and very soon you will start seeing action from our side.

Q: When you say very soon, how soon can we actually expect you and Wal-Mart to move the Foreign Investment Promotion Board (FIPB) and then individual state governments to get multi-brand retail stores off the ground?

A: While only eight or nine governments have given a go ahead, I am absolutely convinced that going forward all the state governments will look at this as a positive step. The concern about the kirana shops, or the small mom-and-pop shops who are into retailing, is not valid to the extent which is being made out be. Most importantly, we need to see how the consumer gets the best quality products.

Q: CII has been pushing for FDI in multi-brand retail, but as a part of CII have you had any conversation with individual state governments? Are they now more amenable to looking at opening up policy for FDI in multi-brand retail?

A: I believe so. The matter of fact is, once these actions start emanating in the states who have already approved it, we will see positive results coming out of that. As a matter of fact, the farmers who are supplying produce to our stores, their productivity has gone up, the quality of produce has gone up.

Another thing that I have been pushing for is to take the perishable produce out of the Agricultural Produce Market Committees (APMC) act, which has not happened so far. My understanding is, the government of Haryana has just gone ahead and notified the perishable produce, where the farmers have been given the freedom to sell directly to food processing companies, retailers and aggregators. That is one area of concern because the policy issues on the agriculture side need to be amended in view of the changing scenario.

For the farmer digging the produce from the field to the mandi, who is waiting there for couple of hours for the middle man to close the transaction, for him, the perishable produce is losing its shelf life with every passing hour.



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