FNB News - CAIT demand probe into Wal-Mart's expenditure on lobbying, Rs 125 crore

You can get e-magazine links on WhatsApp. Click here

TOP NEWS

CAIT demand probe into Wal-Mart's expenditure on lobbying, Rs 125 crore

Tuesday, 11 December, 2012, 08 : 00 AM [IST]

Akshay Kalbag, Mumbai

The lobbying disclosure report of Wal-Mart, described by the Confederation of All India Traders (CAIT) as the world's largest middleman, which states that the lobbying expenditure of Rs 125 crore (to facilitate its entry into India's retail space), has promised the traders' body to demand that the Government announce an immediate investigation into the matter and include the actual beneficiaries of the said amount in the ambit of the probe.

CAIT also demanded that the Parliament's Public Accounts Committee would be the preferred investigating agency, because that would ensure an impartial and transparent investigation. “Moreover, it should be carried out in a time-bound schedule, because the matter not only has deep concern with the country's image and integrity, but the government's image would also be at stake,” the traders' body said.

“If a multinational corporation (MNC) can spend such a huge amount on lobbying only, it can be easily estimated that to control and dominate the country's retail trade, it can spend any amount of money. However, this will not only become a major cause for concern for national security, but it will also open up the possibility of a major scam,” CAIT said, adding that Sankalp Divas will be observed across the country on December 12, 2012.

At a press conference in New Delhi, Praveen Khandelwal, secretary general, CAIT, showed Wal-Mart's lobbying disclosure report for 2011 and said, “This report also contains lobbying expenses incurred by Wal-Mart in India with regard to foreign direct investment (FDI) in multi-brand retail. The issue is certainly above any kind of politics, and the government needs to take immediate cognisance of this issue as it has a direct link with the country's image and security.”

“Last year, a news report stating that Wal-Mart spent Rs 60 crore on lobbying in India appeared, and although CAIT raised this issue, the government did not take any action,” he said. Apart from Khandelwal, the CAIT office-bearers present at the conference included Satish Garg, organising secretary; Narender Madan, state president, Delhi; Ramesh Khanna, national secretary; Vijay Pal, state general secretary, Delhi, and Adarsh Gupta, in-charge, national headquarters.

Naresh Sirohi, general secretary, Bhartiya Kisan Morcha; Pradeep Sharma, coordinator, Khudra FDI Virodhi Rashtriya Morcha (KFVRM); Saudan Singh, state president, National Hawkers Federation; Ved Prakash Gupta, convenor, Laghu Udyog Morcha; Ravindra Bansal; M L Dhawan; Pradeep Singhal; Ashutosh and Rajender Kapoor, were among the other leaders who attended the conference.

Khandelwal said, “Anand Sharma, union commerce minister, laid FDI policy papers on November 25, 2011 on the floor of Parliament. The subsequent notification, issued on September 20, 2012, contains major deviations. Since the papers were laid in Parliament, the government was under obligation to discuss the issue in Parliament, but unilaterally the notification was issued on September 20, 2012.”

“In the intervening period between the laying of papers in the House and the issuing of the notification, Wal-Mart spent Rs 18 crore. The modified notification provides many extraordinary benefits and advantages to the global retailers, which includes the non-inclusion of 'cold storage and modern transport system' in the definition of back-end infrastructure as mentioned in the notification,” he said.

Khandelwal added, “The dilution of 30 per cent procurement condition from small industries will allow global retailers to open their outlets as per their choice, even in states not having cities whose population exceeds 10 lakh. It is, therefore, of utmost importance that the investigation should also attempt to ascertain whether there is any link between Wal-Mart's expenditure and large-scale modification in the notification.”

“On November 15, 2012, CAIT had raised eleven questions to the government pertaining to the entire episode of FDI in retail. But it hasn't neither reverted in Parliament nor outside it yet. Since Wal-Mart's lobbying expenses in India is a new revelation that's come in the public domain, the matter assumes a great deal of significance and mandates an impartial investigation,” Khandelwal said.

He added, “It is not only the matter of Wal-Mart alone, but more than 30 global retailers are eyeing the entry into Indian retail trade. Therefore, the investigation should also see whether other other global retailers have done this practice and if so, upto what extent. The notification has been issued in haste, which has created a big question mark on the credibility of policy-makers.”

“The gross ignorance of the democratic process including ignoring the unanimous report of the Parliamentary Standing Committee and ignoring the majority of opposing views received by the ministry of commerce and industry in response to its discussion paper, coupled with the fact that there was no consultation with stakeholders leads to a number of doubts,” CAIT's secretary general said.