After dilly dallying for some time on the issue of FDI in multi-brand retail and aviation, the central government of India finally seems to have made up it’s mind.
Today, on 14th September 2012, the government approved foreign direct investment (FDI) in multi-brand retail, aviation sector and broadcast services while permitting divestment in four state-run companies including NALCO, MMTC, Hindustan Copper and Oil India. While operationalising the 51% FDI in retail, the Union Government left it to the state governments to allow setting up of such stores.
India’s inability in the past months to push through major reforms and ease its subsidy burden as growth slowed sharply has put it in danger of becoming the first of the big “BRICS” emerging economies to see its credit rating downgraded to junk.
The opposition and many of the Congress alies in the government are opposed to such a move and they are expected to protest against this move.