Reforms in retail sector should not be conduit for money laundering, says Swamy

New Delhi, Nov. 28 (ANI): With a united opposition mounting pressure on the Centre to revoke the decision of 51 percent Foreign Direct Investment (FDI) in multi-brand retail, anata Party chief Subramanian Swamy on Monday urged the government to ensure that the latter's move to open up the retail sector for the global giants does not pave way for money laundering in Asia's third-largest economy.

"Even on FDI (Foreign Direct Investment), I would say the government should ensure us that it will not be used as a method of money laundering," he told mediapersons after he registered a complaint in connection with the black money stashed away in safe havens abroad.

Swamy said that the government would have to prevent any such misappropriation of finances if the intended retail reforms reckon the mass opposition within and outside the Parliament.

"FDI in retail has to be watched very carefully. It could be money, black money going out of India and coming back to get laundered through FDI. Because today Mauritius has become the largest supplier of FDI to India which is shocking, considering Mauritius doesn't have anything more than gambling casinos and beautiful beaches," he added.

On Monday, parliament was adjourned till Tuesday after the opposition entered the Wells of both Houses to vociferously express its strong resentment against the decision to allow 51 per cent FDI in multi-brand retail.

A Cabinet decision to this effect was taken last Thursday, and if the proposal sees the light of day, it would allow global retailers like Wal-Mart, Carrefour and Tesco to open outlets in India.

The Cabinet also decided to remove the 51 per cent cap on FDI in single brand format under which companies in food, lifestyle and sports business run stores. Owners of brands like Adidas, Gucci, Hermes, LVMH and Costa Coffee can now have full ownership of business in India.

Foreign Direct Investment (FDI) or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.

It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. It usually involves participation in management, joint venture, transfer of technology and expertise. (ANI)