Govt may restart reform process in retail & aviation

After resorting a bold move on the petrol price revision, the government may soon restart the process to approve FDI in multi-brand retail and aviation sector. Both measures can increase the much-needed foreign exchange to help check the sliding rupee.

A senior finance ministry official here maintained that the government will soon start a series of steps including holding fresh consultations with allies on allowing foreign players in retail and aviation sectors to boost overseas investors’ confidence and inflows.

“There will be reform measures in the next 2 to 3 weeks,” the official informed Deccan Herald. Sources also said that the approvals may be given before the monsoon session of Parliament.

Thursday’s meeting of Jean Noel Bironneau, the head of French retail giant Carrefour with Commerce and Industry Minister Anand Sharma is also understood to have touched upon the issue of allowing FDI in multi-brand retail.

Last November, the cabinet cleared FDI in multi-brand retail but the decision was rolled back following West Bengal Chief Minister Mamata Banerjee’s opposition.

But, Sharma has maintained that the FDI in multi-brand retail will go ahead. He recently assured the overseas investors that India has not gone back on its decision.

The government is mulling allowing foreign direct investment up to 49 per cent in aviation industry by foreign airlines.

Meanwhile, recent government data showed that India got an eight-fold increase in FDI in March this year at $8.1 billion, the highest ever monthly inflows. Total FDI inflows for the fiscal 2011-12 amounted to $46.84 billion, 23 per cent more than $38 billion in 2010-11.

Services, pharmaceuticals, telecom, construction, power and metallurgical industries are the sectors that got the larger share of FDI.

Mauritius infused highest inflows worth $9.42 billion, followed by Singapore $5.07 billion and Japan $ 2.86 billion among others.