Govt committed to 51% FDI in multi-brand retail, says Pranab Mukherjee

Finance Minister Pranab Mukherjee on Monday said that a “tight monetary stance has impacted growth”. A slowdown in direct investments in India has also impacted the current account deficit, he noted, adding that the country needs to aim for double digit growth,

He also reiterated that the government was continuing to push for reforms in multu0brand retail to allow 51 per cent foreign direct investment (FDI) in the segment. 

Mukherjee said that the European debt crisis was a setback for a global economic recovery and that “robust revival in emerging markets has also begun to falter”

However, he added that policy measures take in recent months for qualified financial institutions to invest directly in the equities markets here have been encouraging and have to higher FII and FDI inflows following the global economic slowdown.

Earlier, the government had passed the measure to allow 51 per cent FDI in multi-brand retail was forced to put in on the backburner after vociferous opposition from other political parties who alleged that they had not been consulted on the matter Currently, 100 per cent FDI is allowed in single-brand retail.

After it became clear that the Bill ran the risk of not passing in Parliament, the Congress-led United Progressive Alliance government decided to put the move on the backburner until it could build a political consensus around it.

FDI in multi-brand retail is being seen as a key to get much-needed foreign funds into the country, where the fiscal deficit has soared past the 4.6 per cent target of GDP, as well as being critical to bring out efficiencies in logistics, supply-chain and cold storage, and farm pricing.

Tags: Bill, FDI, FII, Finance Minister Pranab Mukherjee, GDP, growth, monetary policy, multi-brand retail, Parliament, United Progressive Alliance