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Amid efforts to appease foreign investors, the Government will have to face strong resistance from the Opposition on relaxation in foreign direct investment (FDI) norms for multi-brand retail trade during the monsoon session of Parliament, which begins on Monday.
In the meantime, the principal opposition BJP is non-committal on the Insurance Bill after its top leaders met Finance Minister P. Chidambaram.
“The Government gave assurances on safeguards in the FDI norms.
“Now those safeguards have been relaxed. We will raise this issue,” the Leader of the Opposition in Lok Sabha, Sushma Swaraj, told reporters after the all-party meeting called by Speaker Meira Kumar on Saturday.
The Union Cabinet, on Thursday, relaxed FDI norms allowing States to choose cities, even with population of 10 lakh, for opening multi-brand retail stores.
It also included medium industries and co-operatives in the definition of small industries, besides doubling the investment limit for such entities to $2 million, while the condition of 50 per cent investment in back-end infrastructure was made mandatory for the first time only. However, the Government is confident of facing the Opposition.
Rupee devaluation
FDI norms have been relaxed for 12 other sectors, including telecom and defence.
This has been done at a time when the rupee has depreciated over 10 per cent in the past three months. Sushma Swaraj said that issues related to rupee devaluation and consequent impact on the economy would be raised during the session.
The rupee closed at an all-time low of Rs 61.10 against the dollar on Friday.
Insurance Bill
Earlier in the day, Sushma Swaraj along with her party colleagues Arun Jaitley and Yashwant Sinha met Chidambaram on the Insurance and Pension Bills. “We have suggested some changes,” she said without giving details.
The Bill proposes raising FDI limit to 49 per cent from the current 26 per cent. BJP has strong objections on raising the cap.
At the same time, the Samajwadi Party, which is supporting the Government from outside, is non-committal on the Bill.
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