FDI implementation will be a welcome step: Biyani

Mumbai: With the government still not decided about allowing foreign direct investment (FDI) in multi-brand retail, Future Group founder and chief executive officer Kishore Biyani has said its implementation will be a welcome step, as it would provide much-needed capital.

"Modern retail is very expensive business. You have to build up the entire distribution, you have to build up the entire supply chain, you have to build retail stores. Today for us the access to capital to build our business is a scarcity. You need capital. We need capital in some form or the other. If FDI comes in, then it is a welcome step. You will drive consumption and ultimately consumption will drive growth," he said here.

"FDI is a subject that we talk about too much in this country. India is the only country where we use the word multi-brand retail. Nowhere in the world we understand this terminology. If there are challenges in opening up super market or food sector in retail, there are other sectors which can be opened up. Ultimately, India never had that kind of capital to grow or change an ecosystem," he elaborated.

The central government had last year allowed 51 per cent FDI in multi-brand retail, but the same could not be implemented in the face of strong opposition from UPA allies including Trinamool Congress, and several state governments.

Biyani further said that the Goods and Services Tax (GST), when implemented, will also be a major game changer for the industry.

Today small retailers have bigger advantage as the tax they pay is different.

"I think GST can be a game changer for us as a physical retailer also. It is a big game changer," he said.

On the e-commerce industry in the country, Biyani said, "E-commerce is doing well in the US because it is a very consumption-driven economy. We are learning to consume value-added products in this country. There are challenges in e-commerce like cost of delivery, cost of technology, among others. We are still 3-4 years away from this business taking off in a significant and profitable manner."

 On June 22, 2008, the High Court had allowed their petition and quashed the order of the Government fixing different pay scales for both categories, teaching and non teaching staff. The Court also asked the Central Government to consider the demand of non teaching staff for parity in wages given to teaching staff.

As the Government did not consider their demand, a legal notice was served to them. The non teaching staff contended that as they did not get the same wages earned by the teaching staff, each employee suffered loss of Rs 5400 per month.

They argued that although their nature of work differed from that of the teaching staff, the quantum and quality of work remained the same for both the categories.

On April 6 last year, the Central Government again put the teaching staff on higher pay scales. Being aggrieved, the non teaching staff filed a petition last month in the High Court seeking parity in wages and also demanded arrears since 1986.