There are a little over 4000 MLAs across all states in India. For the citizen, a law passed by his state legislature is as relevant and important as one passed by Parliament. And MLAs also have no research support available to them to understand and reflect on policy issues before voting for them in the state assembly. To make matters worse, the sittings in many state assemblies are abysmally low as can be seen from this graph showing some states. For a while now, several MPs have been urging PRS to initiate some work with MLAs. We started a Policy Guide series some months ago -- essentially a 2-page note on policy issues of contemporary relevance that would be useful for MLAs. We started sending these out to MLAs in several states, and some MLAs called PRS back for more information and research. As a way to increase the engagement, PRS decided to hold a workshop for MLAs. For this, we partnered with Indian School of Business, Hyderabad, and held our first workshop for MLAs from Jan 3-6, 2011. In the first edition of the workshop, we had 44 MLAs participating from a dozen states across India. The response was overwhelmingly positive (see short videos of MLA feedback here), with requests from MLAs to hold more such workshops for other MLAs as well. Several also wanted longer duration workshops on important policy issues. We see this as a small beginning for a sustained engagement with our MLAs.
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 |
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Farmers |
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Consumers |
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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]