Govt notifies FDI in retail, PM may address nation today

  • Agencies, New Delhi
  • |
  • Updated: Sep 21, 2012 00:18 IST
  • Bharat Bandh

    Indian activists from the opposition party Bharatiya Janata Party shout-slogans against Congress-led UPA government during a demonstration in Amritsar. AFP/Narinder Nanu

  • Navjot Singh

    BJP MP and veteran crickter Navjot Singh along with his supporters raising anti UPA goverment slogans during Bharat Bhand in Amritsar. HT/Munish Byala

  • Bharat bandh

    A truck driver taking a nap during chakka jam by truck operators union on the call of nationwide bandh against UPA government in Jalandhar. HT/Pardeep ...

  • Jalandhar bus stand

    Jalandhar bus service was also affected by the nationwide bandh called against the UPA government on Thursday. Pardeep Pandit/HT

  • Workers sitting outisde

    Workers sitting outisde a closed shop in Amritsar during the nationwide bandh called against UPA government on Thursday. Munish Byala/HT

  • Residents passing

    Residents passing through the closed market during Bharat bandh in Amritsar on Thursday. Munish Byala/HT

  • Bharat Bandh

    BJP activist beat drums and shout slogans during the opposition-sponsored 'Bharat bandh' to protest over FDI in multi-brand retail and increase in diesel prices, in ...

  • Bharat Bandh

    Demonstrators from the Samajwadi Party shout slogans after they stopped a passenger train during a protest against price hikes in fuel and foreign direct investment ...

  • Bharat Bandh

    Indian police officers detain activists of Telugu Desam Party during a protest at a bus station in Hyderabad. AP/Mahesh Kumar A

  • Bharat Bandh

    Samajwadi Party activists hold an effigy representing Prime Minister Manmohan Singh and his cabinet colleagues before burning it during a protest along railway tracks in ...

Against the backdrop of widespread uproar over decision on FDI, Prime Minister Manmohan Singh is likely to explain to the nation on Friday the reason behind the step and the benefits it would entail.

The Prime Minister's explanation could be in the form of a written message or a televised address, sources said.

PM is expected to spell out the reasons that prompted the government to allow FDI in multi-brand retail.

He is likely to cite the difficult times facing the economy and emphasise that the step was aimed at pushing economic growth and generating employment.

The thrust of the Prime Minister's message is expected to be that the step was taken in national interest.

After the Cabinet decision on September 14, Singh had said the step was intended to "bolster economic growth and make India a more attractive destination" for foreign investment.

"I believe that these steps will help strengthen our growth process and generate employment in these difficult times," he had said and sought support of "all segments of public opinion" for this.

The decision to go ahead with FDI in multi-brand retail has evoked angry reactions from Trinamool Congress which is going to quit the UPA government on Friday.

UPA's outside allies like Samajwadi Party and JD-S as well as opposition parties are also agitated over the decision and organised nationwide agitations on Thursday.

FDI in multi-brand retail notified

Showing resolve for reforms, the government on Thursday notified its decision to allow global retail giants like Walmart to open stores in India, on a day several political parties called Bharat Bandh to protest against the policy.

With this notification, multinational retailers can invest up to 51 per cent to open stores in 10 states and UTs which, till date, have agreed to implement the decision.

"51% FDI in multi-brand retailing, in all products, will be permitted," a notification by the department of industrial Policy and Promotion (DIPP) said. It said the decision will take immediate effect.

The DIPP also operationalised September 14 Cabinet decisions to relax the sourcing norms for foreign retailers investing beyond 51 % in single-brand retail and allow 49% FDI by foreign airlies in the domestic carriers.

Besides, the decisions on permitting 49% FDI in power exchanges and increase in foreign equity cap from 49% to 74% in the service providers like DTH in broadcasting sector have also been notified.

In the most controversial area of FDI in multi-brand, the the DIPP said the State Governments and UTs would be free to take their own decisions.

"Therefore, retail sales outlets may be set up in those States\UTs which have agreed, or agree in future, to allow FDI in MBRT (multi-brand retail trading) under this policy".

Minimum amount to be brought in by the foreign investor would be USD 100 million and outlets may be set up only in cities with a population of more than 10 lakh.

At least 50% of FDI should be invested in 'back-end infrastructure' within three years of the first tranche.

To protest against the government's decision, NDA, Left and SP called Bharat Bandh. The parties were also protesting against the diesel price hike and cap on subsidised LPG.

FDI in aviation notified

Moving ahead with the reforms, government on Thursday also notified the Cabinet's decision to allow foreign airlines to pick up upto 49% stake in private Indian carriers.

"The government of India has reviewed the position in this regard and decided to permit foreign airlines also to invest in capital of Indian companies operating scheduled and non-scheduled air transport services up to the limit of 49% of their paid up capital," the notification said.

This would now pave the way for much-needed equity infusion into Indian carriers which are in dire need of funds for operations.

The Cabinet Committee on Economic Affairs, last week, had allowed foreign airlines to invest in scheduled and non-scheduled air transport services. The move is aimed at boosting the cash-strapped aviation sector.

The investments would be made under the government approval route and the parties need to comply with regulations of Securities and Exchange Board of India, like issue of Capital and Discloser Requirement and Substantial Acquisition of Shares and Takeovers Regulations, as well as other applicable rules and regulations, the notification said.

Earlier, no foreign airlines were allowed to invest in Indian carriers directly or indirectly.

India Inc hails FDI in retail

Hailing the Centre's decision to implement FDI in multi-brand retail, the industry on Thursday said this will give a strong message to investors that the government means business and stands firm on its initiatives.

Industry body Assocham complimented the government on its firm decision on economic reforms.

"This will give a strong message to investors inside as well as outside the country that the government means business," Assocham Secretary General DS Rawat said.

The politicians must distinguish between politics and economics in the interest of the country. Though not much investments will be flowing from investors immediately but the message it carried is huge, he added.

The government today notified FDI in multi-brand retail operationalising the Cabinet decision.

The department of industrial policy and promotion also operationalised September 14 Cabinet decisions to relax the sourcing norms for foreign retailers investing beyond 51% in single-brand retail and allow 49% FDI by foreign airlines in the domestic carriers.

Besides, the decisions on permitting 49% FDI in power exchanges and increase in foreign equity cap from 49% to 74% in the service providers like DTH in broadcasting sector have also been notified.

The development comes on a day when a nation-wide bandh was called by BJP, Left parties and UPA's outside supporter SP to protest diesel price hike and FDI in multi-brand retail evoked mixed response with life and trade being disrupted in some states.

CII said it is important to stay on track on reforms.

The entire decision on multi-brand retail will go a long-way in capital infusion in the country and also leads to strengthening of linkages including benefits to farmers," CII Director General Chandrajit Banerjee said.

This is an important reform for India for both growth and development, he added.


also read

UPA not averse to acquiring 'new friends': Chidambaram

blog comments powered by Disqus