FDI Hold Back: Business Bows to Politics Again

Bangalore: No miracles, business bowed to politics again and Foreign Direct Investment (FDI) in retail is back to the box again and the much-awaited roll-out is suspended 12 days after it was announced. The UPA government was compelled to suspend the roll out, beyond the business interests, but purely from political pressure from its allies as well as foes as Pranab Mukherjee, the Congress trouble shooter Pranab Mukherjee made it very clear that the government is forced to make this move to avoid "pre-mature elections." Finance Minister feels that going ahead with the UPA decision would have created a crisis for the government.

However, the decision has disappointed the Indian corporate world and the business community which termed the move as deeply disappointing and highly regressive. Terming the decision to invite foreign direct investment in the retail sector as an important progressive reform,  Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII), said the decision to hold back FDI in retail will have a strong impact on investor sentiment and also the foreign investors. FDI in multibrand retail is an important reform agenda and this offers India a great opportunity. “CII firmly hopes that this would not be a roll back and a quick consensus is reached. FDI in multibrand retail would have multifarious advantages to Farmers, MSMEs, Producers, Consumers and Government alike”, Banerjee added.

The president of Federation of Indian Chambers of Commerce and Industry (FICCI), Harsh Mariwala, said, “The government decision to hold back up to 51 percent FDI in multi-brand retail and 100 percent in single brand retail is deeply disappointing. 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 the reforms like these should take place.”