Ailing economy, UPA get FDI dose

Battling to dispel the perception of “policy paralysis,” the Manmohan Singh government on Friday unleashed big-ticket reforms such as allowing 51 per cent foreign direct investment (FDI) in multi-brand retail, 100 per cent in single brand retail and 49 per cent in civil aviation.

The Cabinet Committee on Economic Affairs, which met under the leadership of Prime Minister Manmohan Singh, also decided to allow 49 per cent FDI in two power exchanges and increase the limit from 49 per cent to 74 per cent in the broadcasting sector. It announced that 100 per cent FDI in single brand retail would be notified soon.

The 49 per cent FDI in aviation will permit foreign airlines to pick up a stake in domestic carriers, many of which are struggling to stay afloat for lack of funds.

The Cabinet also announced disinvestment of its equity in four public sector companies to raise Rs. 15,000 crore.

The measures drew a strong protest from the Trinamool Congress. It set a 72-hour ultimatum to the government to withdraw the 51 per cent FDI in multi-brand retail and the increase in diesel price. The BJP and the Left said the unfortunate steps were taken under foreign powers’ pressure.

“We will soon notify the guidelines for 51 per cent FDI in multi-brand retail. It has been left to the States to implement the decision on allowing global chains such as Walmart, Tesco and Carrefour to open… outlets in their territories. The Cabinet had taken this decision on November 24, 2011, but had to suspend it following uproar in Parliament. After a long-drawn process of consensus with the stakeholders, including various Chief Ministers, it has been decided to notify the decision. Let us not confuse consensus with unanimity. For unanimity, we will have to wait in eternity. This decision has consensus,” Commerce and Industry Minister Anand Sharma told journalists.

The Chief Ministers of Delhi, Assam, Maharashtra, Andhra Pradesh, Rajasthan, Uttarakhand, Haryana and Manipur, Jammu and Kashmir and the Union Territory of Daman and Diu and Dadra and Nagar Haveli expressed support for the policy in writing, Mr. Sharma said. But the governments of Bihar, Karnataka, Kerala, Madhya Pradesh, Tripura and Orissa expressed reservations about it.

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Printable version | Oct 23, 2021 2:32:30 PM |

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