It is obvious that it is the slowing of the economy, post-demonetisation, that has prompted the government to accelerate the process of divestment and liberalise FDI norms on a large scale. As the real estate business has been crippled, allowing 100% FDI under the automatic route for real estate broking services can help matters. As no domestic business house may be ready to invest in debt-ridden Air India, permitting 49% foreign ownership in the airline may boost its prospects of survival. But opening the floodgates as far as single brand retail trading is concerned, which is bound to dilute norms such as 30% mandatory local purchase, spells trouble (‘Business’ page – “Centre opens arms to single brand retail FDI”, January 11). The sudden changes may help India’s rank for ease of doing business go up a few notches and cash inflows may make things look better, but what about the resultant and adverse consequences in the long term for the unprotected Indian domestic market?
D.V.G. Sankararao,
Nellimarla, Vizianagaram, Andhra Pradesh
