Commerce and industry minister Anand Sharma told reporters on his way to Cambodia for the 10th Asean-India summit that the decision of the executive to allow 51% foreign direct investment (FDI) in multi-brand retailing does not require endorsement from the ruling partys political opponents. A high-level Indian delegation led by Prime Minister Manmohan Singh later reached Cambodias capital Phnom Penh for the summit.
Sharma said the decision was taken in a considered manner looking at the interests of the farmer, the need for job creation and the requirement of an integrated value chain to limit agricultural produce from perishing.
You cannot expect a government in office to have executive decisions vetted and endorsed either by ideological opponents, some of who have blinkers on, and by others who have vested interests, Sharma said while vehemently defending the recent Cabinet decision to allow foreign supermarkets like Walmart to set up retail outlets in India. This is a policy that is cast in stone, said Sharma.
Left parties have sought a debate on the issue in both Houses of Parliament under rules that entail voting. This could prove embarrassing for the UPA regime, whose numbers have come down after the withdrawal of support by the 19-MP Trinamool Congress. The BJP also is likely to put pressure for a rollback of the decision to allow 51% FDI in multi-brand retail. The government will also have to answer questions on rising prices, sluggish economic growth and various controversies surrounding natural resources in the winter session of Parliament.
The Cabinet hopes the decision on retail will help in attracting foreign capital and, in turn, boost economic growth. We know that the confidence of investors in Indias policy regime has been reinforced with the firmness that the government has demonstrated in taking decisions, Sharma said.
He protested at the fact that the government is always targeted by the opposition either for inaction or for taking pro-reform steps. Are we not the same government which has been unfairly targeted for not taking decisions An atmosphere was created where decisions were delayed, decisions were trapped in controversies and one clich which was commonly used was policy paralysis. When you take a decision, its timing and wisdom gets questioned. If you are deliberating on a decision, you are called indecisive, Sharma said, lambasting the governments critics.
Sharma said agrarian states have asked for foreign ownership in retail sector, which cannot be denied. The policy allows states that are either not ready or are not in favour of foreign-controlled supermarkets to not implement it. He said 10 states have already rolled out the policy. The Foreign Investment Promotion Board (FIPB), the apex body clearing FDI into the country, will approve Swedish home furnishing retailer Ikeas proposal if it meets the parameters and conditions set in the policy, the minister said.
The Cabinet has recently decided to open up insurance and pension sectors to 49% FDI and the government wants Parliament to approve these, along with the Land Bill and Companies Bill.