Return of the ghost called FDI

Amidst controversies and oppose from outside the government, the Union Cabinet green singled
for foreign direct investment in different sectors. Despite of strong oppose from many allies,
UPA-2 moved ahead with the decision of allowing foreign investment of 51% in multi-brand
retail and 49% in aviation power exchange. Retail sectors giants such as Wall Mart, Tesco and
Carrefour are already enjoying Indian wholesale retail market in collaboration with Indian retail
companies.

With new economic reforms Government is all set to welcome foreign investors with open
arms. Now, it will be easier for foreign retailers to launch outlets in 51 cities with a minimum
population of 10 lakhs as per 2011 census. However, investment of minimum of $100 million
is must and out this, 50% must be utilized in establishment and development of backend
infrastructure as par new regulations. Central government played safe by making FDI optional
for states, considering the political stir against the FDI. Whereas, to cure the ailing aviation
sector, as per latest amendments foreign investors who are not associated with airline business
can buy up to 49% equity in Indian aviation companies. With Companies Bill, 2011 and Pension
Fund Regulatory and Development Authority Bill foreign investment in Insurance sector will be
now 49% from present 26%. To put the slowed Media industry on fast track government have
tried to boost the investment by increasing the cap of broadcasting service providers to 74% from
49%. This hike is for DTH service providers which will help in digitization of cable network and
in availing mobile television services. As per the Union cabinet’s decision TV news channels
and FM radio channels can draw the investment of 26% from foreign investors.

Foreign investment is less a part of economic reforms instead more of a political issue. Ruling
party is trying to convince common people and innocent voters to support FDI and vote for them
in coming elections and opposition is trying to turn the tide against the FDI. FDI is a frequently
debated issue which got its own political colors in India.

(Published In IAAN Express)