India's Prime Minister Singh pledges to revive the Indian cabinet's plan to allow 51% foreign investment in multibrand retail, says move 'is the only path to reduce the chronic poverty millions still live under'
December 15, 2011
– India’s Prime Minister Manmohan Singh has pledged to revive the Indian cabinet’s decision to allow 51% FDI in multibrand retail, Bloomberg reported on Dec. 14.
The measure was suspended on Dec. 7 after protests from coalition allies as well as opposition parties.
Singh said, “There was inadequate preparation and some partners in the coalition developed cold feet. But I can assure you, India remains committed to a system of regulation that is supportive of enterprise and we will do everything to encourage foreign investment.”
He added, “There may be zigzags along the way, but the path is the one I set. It is the only path to reduce the chronic poverty millions still live under.”
Singh predicted that, during the fiscal year that ends on March 31, inflation will fall to 6% to 7% while gross domestic product will rise to 7.5%.
He further projected that, once the global economy has stabilized, India’s earlier trend of undergoing 8.5%-9% growth will resume.
Eswar Prasad, a former International Monetary Fund economist and a senior fellow at the Brookings Institution in Washington, said, “Reforms were not sold the way they ought to have been. The narrative that was built up around the change in policy on FDI into retail was that it would end up benefiting some big multinational companies,” rather than focusing upon how the measure would help improve India’s distribution system and lower prices for consumers.
The primary source of this article is Bloomberg, New York, New York, on Dec. 14, 2011.