'India economic reforms fate look bleak'
of mom and pop store owners.
The reform does no require parliamentary approval. But left- and-right-wing opposition parties, with an eye to upcoming state and national elections, want to use the session to hold the government to account on the policy, which they say does not have popular support.
They are pushing hard for a symbolic vote against the measure. If the government lost the vote, it would be an embarrassing setback for a policy on which it has staked so much political capital. It could also sap its political will to pursue more difficult reforms to cut high spending and reduce a ballooning budget deficit.Most of the initiatives Singh has announced to date have required only an executive order, so this session of parliament poses the biggest test yet of his reform drive.
If he fails to get key allies and the BJP on board, his reformist legislative agenda could stall. Among the reform bills due to be introduced are measures to allow up to 49 percent foreign investment in local insurance companies and domestic pension funds. Currently, the cap for insurers is at 26 percent and foreign investors are barred from buying into pensions.
UNCERTAINTY
Uncertainty surrounding the passage of these bills has contributed to a 3.8 percent fall in the benchmark BSE stock market index since the start of October. The rupee, meanwhile, has shed all of its gains since the government launched its new economic reform drive in September.
Analysts attribute the fall to a host of factors, including the global downturn,
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