Even as the move to allow foreign direct investment in multi-brand retail has been put on hold, various stakeholders are hopeful that the government may look at expediting the decision to hike the sectoral cap in single-brand retail from 51% to 100% by delinking it from the contentious decision of FDI in the multi-brand segment.
?Since the statement made by finance minister Pranab Mukherjee in Parliament dealt only with FDI in multi-brand retail, it appears that the government may soon issue the guidelines for FDI in single-brand retail,? a government source told FE. However, this step will be taken with caution and will be timed keeping in mind the sentiment expressed by the Opposition in and outside Parliament, the source said.
The minutes of the Cabinet meeting that was held on November 24 have reached the department of industrial policy and promotion (DIPP). ?A number of key players are ready with their investment plans in single-brand retail. Therefore, the government will take cautious steps before coming out with official notification, which could be sooner than later,? a senior official said.
On November 24, the Cabinet had cleared the proposal to hike the sectoral cap in single-brand retail and multi-brand retail together. This move saw widespread resistance from all quarters including Opposition parties and UPA allies. The Trinamool Congress, a UPA constituent and partner in the government, had said it would vote in favour of an adjournment motion against FDI in retail.
However, the opposition was centred on FDI in multi-brand retail and not on single-brand retail, which has given hope to the various stakeholders that a hike in FDI cap in the single-brand segment may come soon.
DIPP secretary PK Chaudhery had earlier said that the country has not been able to attract enough investment as it had expected, rather an investment of only $44 million had come under single-brand retail.