Thaindian News

New Delhi, Nov 20 (IANS) Some big-ticket reforms proposed over the next couple of months, such as foreign investment in multi-brand retail, pension fund and aviation, will help fend widespread perception of policy paralysis in India, say experts.

“These are many proposals. If they materialise, they will, indeed, send a very positive signals to India Inc and global investors,” said Anis Chakravarty, director, Deloitte Haskins and Sells. “They will also help boost growth and curb inflationary pressures.”

The finance ministry Thursday gave its consent to allow up to 51 percent foreign direct investment in multi-brand retail and raise the limit of overseas equity investment in single-brand retail to 100 percent from the existing 51 percent.

This will now go to the cabinet soon for a final nod. This apart, earlier this week, the government announced its intent to liberalise the pension sector, allow up to 24 percent foreign direct investment in it and set up a regulator.

“These were all pending for a long time. These are critically important. The government has shown its intention to move ahead with it. Now, the important thing is how quickly these are finalised and implemented,” Chakravarty told IANS.

“Ideas and intentions are great, but implementation is the key.”

These are also politically sensitive matters and the government has been facing a lot of resistance from not just some opposition parties, notably the Left, but also some allies within. These will be put political test when parliament session commences Tuesday.

“These are very positive developments. I feel this is partly in response to the pressure from the India Inc,” said Rajiv Kumar, secretary general, Federation of Indian Chambers of Commerce and Industry.

“We have been actively pushing for second generation reforms. I am glad the government is responding positively to it in view of slowing growth and spreading perception over policy paralysis. We have been waiting for long. Hope it happens this time.”

Several industry leaders have openly voiced their concerns over the very little progress on key economic reforms. A group of 14 top business leaders and policy analysts recently wrote an open letter, urging the government to speed up reforms and push growth.

Reliance Industries Chairman Mukesh Ambani, for example, asked the government to live up to the aspirations of young Indians. “The government needs to work at a faster pace,” he said. “Just because we live in a democracy doesn’t mean that we should feel paralysed.”

Ficci’s Kumar said reforms like allowing the entry of foreign players like US-based Wal-Mart and French Carrefour in multi-brand retailing will also help fight inflation, the most challenging problem for policymakers.

India currently allows up to 51 percent foreign investments in single-brand retail and 100 percent foreign direct investment in cash-and-carry wholesale trade. No overseas investment is allowed in multi-brand retail. Kumar hoped this will change soon.

“Foreign investment in multi-brand retail will help supply system ease price rise,” he said, adding: “Hope this is done fast. This is an executive decision. It does not have to go to parliament for a vote.”

(Gyanendra Kumar Keshri can be reached at gyanendra.k@ians.in and biz@ians.in)