Recently the Govt of India has announced to open doors for FDI upto a certain limit in single brand and multi brands. Its natural to rise a question whether it is good?, if yes to what extent???
If, define FDI, it is Foreign Direct Investment through Automatice Route i.e. investment by foreigners which do not require prior approval of Govt of India and/or the Reserve Bank of India, under the Foreign Exchange Management Act, 1999.
Consequently, it will inspire for investors to invest in India in retail sector. It will enhance our fund of foreign exchange, strengthen exchange rate of Indian Rupee, supply of products will balance the demand and supply hence there could be a sufficient decline in prices or say inflation.
To some extent it will create ample of job opportunities by way of constructions, marketing, management, information technologies, manufacturing, transportation of goods and many more (or say for the infrastructure which the upcoming markets will need). Simultaneously it will enhance Govt revenue by way of indirect taxes viz. sales tax, custom duties etc. Moreover having sufficient volume of funds of foreign exchange will make it easy for the country to import more essential products and technologies.
Again, its natural to arise a question, if all above are the benefits of the said FDI initiative, why it was not taken earlier?? A general response to the question is enough that until the things don't go beyond control, we need not to go to our neighbour to ask him to come to us and help. In present situation inflation and prices of all essential commodities are at the sky. Situation is day by day going beyond control. Hence, it has become a compulsion over the Govt to find out an immediate solution and to go for such a welcome move before elections.
On the other hand, this move has its' demerits also. It may harm to some extent native retail markets, small scale industries may have to go out of the markets as the people having small retail business are arguing with their protest. Moreover there may be chances of dumping into our markets which in long run increase the prices of concerned products and may have adverse effect over the jobs etc.
Still, there is an understanding among WTO members that the member countries will try to make the Globe as free trade economy. The present move although has it's demerits yet the merits are more and it is need of the hour. At this moment, we don't have any other choice except welcoming this move. Of course, the Govt, should impose appropriate restrictions & conditions and continuously review it as and when the time and economy demands for.
good read.....but i contradict ur thought of being FDI the way that should be adopted for controlling the inflation,there are many other doors open to take up the way for slipping out of the situations that are ryt now a big issues................u talkd about the merits for INDIA,but Mr.Sharma What About the INDIANS??????who are basically depended upon our retail markets the lower n the middle class,what a gr8 setback will they have to suffer who will talk abt those....thanx 4 such a lovely post bt still u need to think abt the other side of the coin too:))
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