India Inc terms holding back FDI in retail 'highly regressive'
Tags:
For the first time since Parliament's winter session began on November 22, both houses functioned normally and even took the critical question hour.
However, the government's decision to allow foreign direct investment (FDI) in retail has come to a halt with an all-party meeting passing a resolution to suspend the move until a consensus.
A very disappointed India Inc has described the move as 'highly regressive'.
"... It is a highly regressive move. For the growth of this vital sector of the economy, which is likely to result in strong linkages with the farm sector and for the economy as a whole, it is imperative that reforms like these should take place," FICCI President Harsh Mariwala said.
The decision to hold back FDI in multi-brand retail will have a strong impact on the domestic and foreign investor sentiment, another chamber, the Confederation of Indian Industry (CII), said in a release.
"We firmly hope that this would not be a rollback and a quick consensus is reached," CII Director General Chandrajit Banerjee said.
Describing the volte face as a case of 'missed opportunity', Assocham Secretary General D.S. Rawat said, 'it will send a very negative message to foreign investors'.
Rawat said FDI in multi-brand retail could have created over 10 million jobs in three years, curbed wastage of farm products and benefited farmers through better prices for their produce.
Ficci urged the government to move ahead with this progressive reform and proposed solutions like considering a maximum of 49 per cent FDI in multi-brand retail and increasing the percentage of sourcing from the small scale sector, which was proposed to be fixed at a minimum 30 per cent.
The government was forced to put its decision to allow FDI in multi-brand retail on hold in view of stiff opposition from UPA ally Trinamool Congress and other political parties.
Minister of State for Parliamentary Affairs Rajiv Shukla dismissed the notion that the government has bowed before the opposition and its own allies, the Trinamool Congress and the DMK.
"There is no question of bowing down. This is democracy. We always wanted to have a discussion. They have agreed on our formula. The meeting went off very well. Parliament will function now," Shukla told reporters.
Allowing FDI in retail was the biggest reform policy of the Manmohan Singh government since it regained power in 2009 and putting it on hold is being seen as an embarrassment for the UPA.
However, the resumption of parliament is good news for the government. It has listed some key legislations, including the anti-graft Lokpal bill, to be passed in the session.
Post new comment