New Delhi: Delhi and Uttarakhand governments have supported the Centre's decision to allow foreign players to open multi-brand retail stores, saying it would help in reducing inflation and benefit farmers and consumers.

The Cabinet had decided on November 24, 2011 to allow 51 percent FDI in multi-brand retail, but the same could not be implemented in the face of strong opposition from UPA-ally Trinamool Congress and several state governments.

Both the Congress ruled governments have written letters to the Commerce and Industry Minister Anand Sharma, who is making fresh efforts for a political consensus on this issue.

In a letter to Commerce and Industry Minister Anand Sharma, Delhi Chief Minister Sheila Dikshit has said FDI in the sector would be of immense benefit to the citizens of the state and farmers located in various parts of the country.

"It is estimated that the wastage in perishable food items is as high as 25-30 percent. Permitting FDI will improve infrastructure, reduce waste, minimise role of rent seeking middlemen, reduce food inflation and stabilize prices," Dikshit said.

She said allowing foreign retail giants to open such stores would also improve agri-commodities management and addressing gaps related to post harvest infrastructure.

"It will lead to substantial investments in back-end infrastructure like cold storage, warehousing and other associated logistics," she added.

Sharing similar views, Uttarakhand Chief Minister Vijay Bahuguna said the decision would unlock the true potential of India's agrarian economy as in the absence of adequate logistic and infrastructure support, a large part of farm produce never reaches the market and farmers remain at the mercy of middlemen.

"Thus, on the one hand the farmers do not get the actual price of their produce while on the other hand consumers are paying many times more than the prices secured by the farmers," Bahuguna said.

He said FDI in retail and the proposal to leave its implementation to the states is a welcome step.

"The Government of Uttarakhand hopes this decision of Union Cabinet is implemented at the earliest as it will bring lot of foreign investments, technology, efficiency and generate rural employment to strengthen country's economy," Bahuguna added.

He said the decision will definitely help his state in increasing income of the rural farmers whose agri -horticulture-organic produce get damaged in large quantities due to non-availability of cold storage and proper marketing facilities.

"We are also confident that FDI in retail would further help refraining migration of the youth from the hilly region of Uttarakhand.

Uttarakhand supports the progressive policy of FDI in multi-brand retail," he added.

(Agencies)

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