Archaic state laws block investment in organised retail sector: Assocham
Updated: Jan 22, 2014 04:09:08pm
New Delhi, Jan 22 (KNN) Industry body ASSOCHAM has said that the Agriculture Produce Marketing Committees Act is coming in the way of domestic organised retail sector in some states in procuring agri-products from farmers.
Leave alone allowing and facilitating foreign direct investment in multi-brand retail, many state governments are following archaic legal framework that comes in the way of even domestic organised retail chains procuring agri-products from farmers and help reduce inflation in food articles, ASSOCHAM said.
Much more investment would have been possible in the domestic organised retail if only it was easy to procure directly from farmers, it said.
Making out a strong case for reforms in agri procurement through scrapping of the Agriculture Produce Marketing Committees (APMC) Act, the ASSOCHAM said cumbersome rules discourage the organised retail to flourish since an efficient supply chain is an integral part of the organised retail and not just a front end.
It said: "Even for companies like ITC, it is extremely difficult to procure wheat since they need individual licence for each of the mandis in the state.
"This is so in several states which do not give one licence for the whole state. If a company wants to procure grains from 50 mandis it will need 50 licences."
The Act has resulted in cartelisation of mandi intermediaries who fleece both consumers and the farmers, it said, adding that "we need to scrap this cartel and help farmers establish a direct contact with retailers".
Assocham said that without these reforms in the state laws, it would be extremely difficult for any global retailer to set up stores in the country even if a particular state allows FDI in multi-brand retail.
The industry body also sought clarity on environmental laws and notifications which lack clarity.
Speaking about the new environment regulations in Western Ghats, it said that lack of clarity is creating confusion in states like Maharashtra and Karnataka which are active in producing and processing horticulture products.
"Different states have different rules in regard to food industries. A company operating pan-India has to deal with different rules," it added. (KNN/SD)
Leave alone allowing and facilitating foreign direct investment in multi-brand retail, many state governments are following archaic legal framework that comes in the way of even domestic organised retail chains procuring agri-products from farmers and help reduce inflation in food articles, ASSOCHAM said.
Much more investment would have been possible in the domestic organised retail if only it was easy to procure directly from farmers, it said.
Making out a strong case for reforms in agri procurement through scrapping of the Agriculture Produce Marketing Committees (APMC) Act, the ASSOCHAM said cumbersome rules discourage the organised retail to flourish since an efficient supply chain is an integral part of the organised retail and not just a front end.
It said: "Even for companies like ITC, it is extremely difficult to procure wheat since they need individual licence for each of the mandis in the state.
"This is so in several states which do not give one licence for the whole state. If a company wants to procure grains from 50 mandis it will need 50 licences."
The Act has resulted in cartelisation of mandi intermediaries who fleece both consumers and the farmers, it said, adding that "we need to scrap this cartel and help farmers establish a direct contact with retailers".
Assocham said that without these reforms in the state laws, it would be extremely difficult for any global retailer to set up stores in the country even if a particular state allows FDI in multi-brand retail.
The industry body also sought clarity on environmental laws and notifications which lack clarity.
Speaking about the new environment regulations in Western Ghats, it said that lack of clarity is creating confusion in states like Maharashtra and Karnataka which are active in producing and processing horticulture products.
"Different states have different rules in regard to food industries. A company operating pan-India has to deal with different rules," it added. (KNN/SD)
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