The implementation of the Food Safety and Standards Act, 2006 has run into rough weather. The Act consolidates eight laws[1] governing the food sector and establishes the Food Safety and Standards Authority (FSSA) as the regulator. It requires all food business operators (including small businesses and street vendors) to obtain a licence or registration. The Regulations under FSSA related to procedure for obtaining a licence or registration was notified on August 1, 2011. According to the Regulations, all food business operators had to get a licence or registration within one year of the notification. Due to opposition from several food business operators (see here and here), the FSSA has now extended the deadline for getting a licence or registration by another six months (till February 2013). However, some of the key concerns regarding the law have not yet been addressed.
Key issues related to the Bill raised by PRS (for more details see Legislative Brief)
Other issues referred to in the media
[1]. (a) The Prevention of Food Adulteration Act, 1954. (b) The Fruit Products Order, 1955. (c) The Meat Food Products Order, 1973. (d) The Vegetable Oil Products (Control) Order, 1947. (e) The Edible Oils Packaging (Regulation) Order, 1998. (f) The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control) Order, 1967. (g) The Milk and Milk Products Order, 1992. (h) Any other order issued under the Essential Commodities Act, 1955, relating to food.
After months of discussion, the issue of FDI in retail is being deliberated in the Lok Sabha today. In September 2012, the Cabinet had approved 51% of FDI in multi-brand retail (stores selling more than one brand). Under these regulations, foreign retail giants like Walmart and Tesco can set up shop in India. Discussions on permitting FDI in retail have focused on the effect of FDI on unorganised retailers, farmers and consumers. Earlier, the central government commissioned the Indian Council for Research on International Economic Relations (ICRIER) to examine the impact of organised retail on unorganised retail. The Standing Committee on Commerce also tabled a report on Foreign and Domestic Investment in the Retail Sector in May, 2009 while the Department of Industrial Policy and Promotion (DIPP) released a discussion paper examining FDI in multi-brand retail in July, 2010. Other experts have also made arguments – both in support of, and in opposition to, the move to permit FDI in retail sales. The table below summarises some of these arguments from the perspective of various stakeholders as collated from the above reports examining the issue.
Stakeholder |
Supporting arguments (source) |
Opposing arguments (source) |
Unorganised retail |
|
|
Farmers |
|
|
Consumers |
|
|
Source: ICRIER [1. "Impact of Organized Retailing on the Unorganized Sector", ICRIER, September 2008]; Standing Committee [2. "Foreign and domestic investment in retail sector", Standing Committee on Commerce, May 13, 2009]; Singh (2011) [3. "FDI in Retail: Misplaced Expectations and Half-truths", Sukhpal Singh, Economic and Political Weekly, December 17, 2011]; Reardon and Gulati (2008) [4. "Rise of supermarkets and their development implications," IFPRI Discussion Paper, Thomas Reardon and Ashok Gulati, February 2008.]; DIPP [5. "Discussion Paper on FDI in Multi-brand Retail Trading", Department of Industrial Policy and Promotion, July 6, 2010]