[Photo/GFX©BDTV]New Delhi: The Manmohan Singh government has finally bitten the bullet. It has allowed allowed 51% FDI in multi-brand retail, 49% investment by foreign airlines in aviation sector and sale of equity in four PSUs.
The decision was announced after a meeting of the Union cabinet and the Cabinet Committee on Economic Affairs. It has approved the proposal of the Department of Industrial Policy & Promotion for permitting foreign investment up to 49 percent, in Power Trading Exchanges.
Bearing the perception of policy paralysis and now the boldest reform yet of the Manmohan Singh government prompting angry reactions even from its stalwart ally Trinamool Congress as well as BJP and Left parties.
The slew of reforms decided upon include raising FDI cap in broadcasting from 49% to 74% and allowing foreign investment in power exchanges.
Many attempt was made to introduce FDI in multi-brand in November last year by the UPA government but kept the decision in
abeyance following stiff opposition from TMC, Samajwadi Party as well as opposition parties.
With this decision the government has opened the supermarket sector to foreign
chains also the move will allow the global firms such as Wal-Mart Stores to set up shop with a local partner and sell directly to consumers for the first time.
Prime Minister Singh was credited as the economist who opened up India's economy in the 1990s, but since taking office eight years ago he has repeatedly put off or rolled back difficult economic decisions.
It has now decided to take the plunge within days of the conclusion of recent session of Parliament which was disrupted over coal scam.
The decisions comes close on the heels of Thursday's hike in diesel prices and capping of supply of subsidised LPG to cut oil subsidises which has already invited protests from allies and opposition.