No Left turn, straight bat on FDI helped
If the Economic Survey is to be taken as an indication, the government is toying with the idea of allowing 100% foreign equity in branded specialised retail companies, while advocating a liberal foreign investment regime in insurance and banking services sectors.
If the move comes along, global retail giants such as Wal-Mart, GAP & Target can open outlets in the country. Current policy bars any investment in retail that sells multiple brands and products.
There have been several violent incidents across states against outlets by Indian retail majors such as Reliance and Subhiksha, as small retail traders fear that big players take away all their customers.
On the issue of opening up the insurance sector, the Survey has suggested raising foreign equity share to 49%. At present, foreign equity stake in the insurance companies is capped at 26%. Foreign joint venture partners have consistently been asking for raising the ceiling. It also suggested allowing 51% foreign equity in a special category of insurance companies that provide all types of insurance like health, weather to rural residents and agricultural activities.
The survey advocates 100% foreign participation in greenfield private rural agricultural banks. It also proposes take over or buy out of other private sector banks. "Such banks would be free to set up any number of branches in any rural or semi-rural area and they would be free to lend to agriculture and
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