The Union Cabinet has approved 51 per cent Foreign Direct Investment in multi-brand retail and 100 per cent in Single Brand retail subject to conditions. Briefing newsmen, Commerce Minister Anand Sharma said, the conditions for FDI in Single Brand retail include that the foreign investor should be the owner of the brand.
Also for proposals involving FDI beyond 51 per cent, thirty per cent sourcing would be mandatory from Small and Medium Enterprises, village and cottage industries, artisans and craftsmen. The Minister said, any firm seeking waiver of the mandatory 30 per cent local sourcing norms would have to set up a manufacturing facility in the country.
The CCEA also gave the nod for permitting foreign airlines to make FDI, up to 49 per cent in scheduled and non scheduled air transport services. It also approved foreign investment up to 49 per cent, including 26 per cent FDI and 23 per cent FII in power Trading Exchanges in compliance with SEBI regulations.
The CCEA also approved the disinvestment of 9.59 per cent equity in Hindustan copper Ltd, 12.15 per cent in National Aluminum company Ltd, 10 per cent in Oil India Ltd and 9.33 per cent paid up equity in MMTC Ltd.
The Minister said, the UPA government has always stood for consensus and these important decisions that would boost economic growth were taken after due consultations with the States and other stake holders.
He said, respecting the rights of the states, the prerogative of implemention has been left to the states. He said, retail sales outlets may be set up in those states which agree to allow FDI in Multi Brand Retail Trading.
The CCEA also liberalised the foreign investment for companies operting in the broadcasting sector from 49 to 74 per cent. These include Teleports, Mobile TV and Headend in- the- Sky Broadcasting service.
The cabinet also approved the financial restructuring of Prasar Bharti and of filling up essential posts based on the recommendations of the Group of Ministers.
During the next five years government non Plan support will be extended to Prasar Bharti for meeting 100 per cent expenses towards salary and salary related expenses. All other operating expenses towards are to be borne by Prasar Bharti out of internal revenue earning.
Information and Broadcasting Minister Ambika Soni said, this will help Prasar Bharti to move forward to fulfill the responsibilities of Public broadcasting.
The Trinamool Congress, an ally of the UPA Government at the Centre has given 72 hours time to withdraw the decision to hike diesel prices and Union Cabinet's green signal on FDI in retail. The party's All India General Secretary and Railway Minister, Mukul Roy said in Kolkata that the Parliamentary Party of the Trinamool Congress will meet on Tuesday to discuss the next course of action on these issues.
While Chambers of Commerce and Industry have welcomed the government decision to bring in reforms, opposition parties have criticized the move.
Reacting to the decision, the captains of industry said these will accelerate economic growth in the country.
Opposition BJP has alleged that the decision to allow FDI in multi-brand retail has been taken under pressure from foreign elements. BJP Spokesperson, Ravi Shankar Prasad told reporters in New Delhi that the decision will affect the livelihood of Indians in retail trade.
CPI Secretary, Gurudas Dasgupta said the decision will affect the jobs of millions of people.
The Tamilnadu Chief Minister Ms.Jayalalithaa expressed shock at the Centre’s decision to open up foreign direct investment in Multi Brand retailing and the aviation sector. In a press statement issued in Chennai, the Chief Minister called the decision as ‘Undemocratic and anti people’ and pointed out that the concerns expressed by the States and the other stake holders were not taken into consideration.
Ms.Jayalalithaa raised strong objections and registered her unequivocal opposition to allow 51 percent FDI in multi brand retailing and demanded that the Centre should withdraw its decision. Disagreeing totally on introducing FDI retailing, the Chief Minister stressed that her Government would never allow FDI in retail trade in the State.
