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It is not the end of the road for the much-talked about reform of allowing foreign direct investment (FDI) in Indian supermarkets. The Finance Minister, Mr Pranab Mukherjee today asserted that the Government has not shelved the plan to allow FDI in multi-brand retail, although it had to recently retract on this issue.
The Government had recently announced that foreign investment (up to 51 percent) would be allowed in multi-brand retail, but could not implement this policy decision in the wake of stiff opposition both from its allies as well as opposition parties.
“We could not fully implement the FDI policy in retail. That does not mean we have shelved it,” Mr Mukherjee told the 106th Annual Session of PHD Chamber of Commerce and Industry here on Friday.
He also said that the Government was committed to getting the PFRDA Bill passed and pointed out that the absence of an “absolute mandate” from the Indian electorate had come in the way of the passage of this Bill.
“We decided to have PFRDA legislated in this session of Parliament but could not do so…not because of lack of intention or commitment. You have to recognise the very hard fact that legislation requires numbers which unfortunately Indian electorate has not given us. They (Indian electorate) have told us you have to carry people with you,” Mr Mukherjee said.
Mr Mukherjee said that new generation reforms like pension and FDI in retail are very much in the “mind of the Government” and that it was working hard to build consensus on these issues. On the economic situation, he said that the situation was “difficult”, but expressed confidence that India would overcome the difficulties. He expects inflation to hover around 6-7 per cent by end of March.
The Finance Minister expressed hope that the recent recovery in the US would be sustained. However, he noted that the Euro zone recovery seems distant.
Mr Mukherjee also said that India needs to invest additional 3-4 per cent of GDP in infrastructure sector to sustain growth and come back to the recent growth trajectory.
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