The central government has invited suggestions from all concerned on the subject of allowing foreign direct investment (FDI) in the multi-brand retail segment. The discussion paper released by the Department of Industrial Policy and Promotion (DIPP) on Tuesday states that allowing FDI in retail will help fund investments in farms and storage chains and reduce prices. This politically sensitive issue has come up for discussion due to paucity of funds in creating back-end infrastructure.

Those favoring the entry of FDI in retail argue that FDI inflow in front-end retail sector is vital for the growth of the country’s agricultural sector and rural infrastructure. Moreover, the massive employment opportunities provided by the capital inflow is immensely helpful in sustaining the economy of the rural segment.

Improvement in farmer income, reining in consumer prices and thereby inflation and elimination of inefficiency in the supply chain structure are some of the advantages pointed out. Prosperity of rural areas and growth in agriculture being two major criteria for the country’s economic well-being, the idea of FDI in retail is finding many takers.

However, detractors are also not in short supply. Spearheaded by the opposition party, BJP, they argue that FDI in retail would displace small vendors resulting in loss of jobs and livelihood. Small-time farmers need to be organized to have any bargaining power. This needs to be addressed, so do other important issues like electricity and surface water.

Union Commerce and Industry Minister Anand Sharma while disclosing his views on the topic said, “We have not released a policy. It is only a debate and we will study the inputs and comments of the stakeholders and then take a sensitive view of the situation. This sector has a potential for tremendous growth and we need to tap that to give a new and dynamic direction to India’s economic growth.”

The discussion paper has clarified that the views expressed in it are that of the department and not the government’s. Stakeholders can submit their comments before month end.

The six core infrastructure industries – crude, petroleum refining, coal, electricity, cement and finished steel – posted a 5 percent growth in the month of May as against 3.2 percent in the same month last year. However, when compared to the previous month, it showed a marginal decline of 0.40 percent.

Petroleum refinery output reported a good growth. In May it registered a growth of 7.7 percent as against a negative growth of 4.3 percent in May 2009. Crude oil production also rose 5.8 percent in May as against a negative growth of 4.3 percent last year. Finished steel growth was less when compared to last year’s growth of 2.8 percent. This May finished steel grew only by 2.5 percent.

Coal production was lowest with 0.1 percent increase in May as against a huge growth of 10.4 percent the same month last year. Cement production also slowed down in May. In May 2009 cement production grew by 11.8 percent but this year it registered a growth of only 8.6 percent. Electricity generation more than doubled at 6.4 percent from 3 percent last year. The first two months this fiscal, the six core sectors witnessed a growth of 5.1 percent as against 3.5 percent in the same month last year.

Highlighting the slow pace of India’s infrastructure, construction work on the main stadium for the Commonwealth Games has been delayed. With little over 4 months to go for the Commonwealth Games, the construction of the main stadium and the swimming pool and few other venues has been delayed. This has raised an alarm among the Commonwealth Games Federation. In an interview, Mike Hooper, chief executive officer of the Commonwealth Games Federation voiced his concern. He said, “I am not wanting to sound alarmist, but the reality is there is a lot more to be done, a lot of finishing work to be done.” The construction work was supposed to be completed by December end but there is lot of work to be completed.

The country is expecting about 2 million tourists in New Delhi for the Commonwealth Games. Over 71 teams from 54 Commonwealth member states are participating in the game. About 10,000 athletes and officials are due to take part. New Delhi is gearing up for the Commonwealth Games and has been overhauling old colonial buildings and completing new roads and rail links to give the city a makeover to try to ensure a successful event. Other than completion of the venue, India has promised a foolproof security system for the Commonwealth Games. The recent bomb blast which went off outside the cricket stadium has also raised concerns.

Though provision is made for a comprehensive setup to provide security, including high-tech scanners and X-ray equipment, government has not made any purchase for these equipments. Once the venue is set it has to be tested for any malfunction before the games and also security equipments has to be installed and tested for their efficacy. Mike Hooper also said, he was wary of threats by mostly Pakistan-based militant groups but said security drills had been satisfactory so far. And “Everybody is concerned about the security environment… but no team has said we are not coming to the Games,” Hooper said.

Delhi Mumbai Industrial Corridor and Development Corporation (DMICDC) on Friday signed a Memorandum of Understanding (MoU) with six Japanese companies including Hitachi, Mitsubishi Corp, Tokyo Electric Power Company and Toshiba. The Industrial Corridor runs through six states, Haryana, Uttar Pradesh, Madhya Pradesh, Rajasthan, Gujarat and Maharashtra and is being developed as an international manufacturing and trading center.

Three state governments, Haryana, Gujarat and Maharashtra, too signed MoUs with the Japanese companies on the sidelines of the seminar ‘India-Japan Business Potential: Exploring New Opportunities’ organized by the Confederation of Indian Industry (CII).

According to the MoUs signed, Japanese consultants will carry out feasibility studies to set up smart communities in Manesar-Bawal region of Haryana, Changodar and Dahej of Gujarat and Shendra industrial region of Maharashtra. Commerce Minister Anand Sharma said that the first phase of the $100bn project will be completed by 2018.

The first phase of the Industrial Corridor project will involve seven cities across the six states. Each city will require an investment of $9-10bn. “We expect industrial output to triple and exports to grow four times on its completion,” Mr. Sharma said. “These will have significant impact on employment generation, industrial production and exports.”

DMICDC chief executive Amitabh Kant elaborated the concept of the project, “A smart community means a city in which citizens, business and government live, work and interact in a sustainable manner through delivery of integrated, low carbon products and services. The industrial corridor provides India a unique opportunity to adopt futuristic smart city concept of minimal pollution, maximum recycling and reuse of finite resources and optimization of energy supplies.”

Mr. Naoshima, Japanese Minister of Economy, Trade and Industry said that India’s growth potential is unlimited with its dynamic middle-class and young population. The smart cities will embrace Japanese model of utilizing all industrial waste as raw materials for its other industries resulting in a zero emission environment and an independent recycling-based community.