introducing fdi in the retail sector will defintely trigger development.but will it reduce the inflation?

Gulshanji can you explain a bit about the effects of fdi and inflation.

introducing fdi in the retail sector will defintely trigger development.but will it reduce the inflation?

Gulshanji can you explain a bit about the effects of fdi and inflation.

Foreign direct investment in retail will allow the retail chains in other countries to directly invest in retail business in India. This may increase competition, allow farmers better price, the consumers may also be benefited. But this will affect many retailers including small vendors. Even though the foreign retail outlets will employ Indians, the small shop keepers will be adversely affect and overall employment position will worsen.

The argument that vegetables will be saved from perishing is not sound. We should be able to preserve vegetables, eliminate middlemen, ensure better price to farmers and consumers even without inviting foreign concerns. It is okay to seek foreign expertise in highly complex technical matters. But it is not a good policy to seek foreign contribution in simple matters like retail.

i understood...but what i am asking is how will this move affect the inflation? Will it cause inflation to decline..?

i understood...but what i am asking is how will this move affect the inflation? Will it cause inflation to decline..?

It is claimed by the government that there will be better preservation of vegetables and other products and so more supply available. The retail outlets will sell these cheaper as there will be more competition. Thus, prices will decrease.

But the vegetables can be preserved and sold cheaper even without inviting foreigners. Why should we need foreign companies to stop wastage and bring down prices?

so definitely this is a move to stop inflation.

Government might have the opinion that inviting the foreign companies will revamp our system.our system which we are following now has only increased farmers suicides and crop losses.

Keeping the Prejudices against foreign companies aside, i think this move will boost our economy.

It's very interesting to hear our FM saying that this would cool down our raging inflation after trying all his tricks and failing miserably in this regard.Poor FM!

chinmoy ji ...inflation has been occuring globally and india is no aberration to that.it is too harsh to blame it on our fm alone. He did his level best...

@Deepak

Even accepting the fact that it's a global phenomenon,why does our FM foolishly set a time-table and and fail to eastablish another?

It's very interesting to hear our FM saying that this would cool down our raging inflation after trying all his tricks and failing miserably in this regard.Poor FM!

I could not agree more. It is ridiculous that we need FDI in retail for bringing inflation down.

FDI in retail trade has been the talking point for years and now the government has moved destructively through a cabinet fiat to destabilise a sector which provides means of survival to nearly 22 crore people!