FDI in retail: Another rollback on the cards?

16 September, 2012

It remains to be seen how government tackles with the 'ultimatum' given by West Bengal chief minister Mamata Banerjee, who doesn't favour allowing FDI in retail and multi-brand beyond certain limits. The government had to earlier rollback its decision after Mamata threatened to leave the coalition.

THE GOVERNMENT has hiked the price of diesel and LPG gas cylinder besides taking another bold step by permitting foreign supermarket chains to enter India. The Prime Minister said that foreign airlines could also buy stakes in the Indian carriers.

The Manmohan Singh's office Friday evening tweeted, “The Cabinet took many decisions on Friday 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.

Mamata Banerjee, Chief Minister of West Bengal refused to play by the PM's new rules and threatened to take 'hard steps' if the policy was not taken back. She wrote on her Facebook page, “We cannot support price hike of diesel and reduction in subsidized LPG cylinders. On Friday, a decision has been taken allowing FDI in retail sector. It is a big jolt.” In previous times we have seen the government buckle under her pressure but this time they (government) seems adamant to not reverse the decision.

The BJP also threatened to protest the new reforms that are apparently put into place to revive a sluggish economy. With the help of the new reforms Wal-Mart can open stores in India, a move that has been protested in the past. Foreign airlines can now also own up to 49 percent in a domestic carrier that will provide the much-needed money required for troubled airlines in India.