JOIN USCorporate India was upbeat on Friday as the UPA government announced a slew of major economic reforms which has been stalled for months due to what is being described as “policy paralysis” in the country.
To start with, the government announced initiatives like opening the retail sector to foreign supermarkets, followed by decision to allow foreign airlines to buy stakes of up to 49 per cent in local carriers, a much-awaited move providing a potential lifeline to the country’s debt-laden airlines by opening up a fresh source of funding.
Business leaders across the country hailed the move by the government.
Godrej Industries Chairman Adi Godrej said, “I think these developments are excellent as this shows that the reforms have restarted and implies that GDP growth will improve and increase employment.”
“Through foreign investment in multi-brand retail, various sectors will be very benefitted as it will improve supply chain, bringing in more efficiencies,” Godrej added.
“The inflow of dollars will also help the currency. More than that the perception on India will substantially improve, which had taken a beating in the recent past. I hope this is the beginning of more reforms.”
According to Videocon Group Chairman Venugopal Dhoot, “What the government was unable to do in the last one year, it has done in one hour.e are expecting at least $15 billion to come in multi-brand retail alone.
Videocon has a large exposure in the retail space and we have been looking at foreign retail partners who will now be able to come. Foreign investment in retail will increase competition, bring prices down and is good for customers.”
Said Sanjiv Goenka, Chairman, R P-Sanjiv Goenka Group: “These steps were anticipated for a while, it is a welcome move on the part of the government. Foreign direct investment in multi-brand retail is positive for Indian industry and retail sector.
Through this, the government has put the country’s development back on track. The fact that the government moved ahead with this step is appreciable and this is a firm policy towards economic reforms.”
Praveen Khandelwal, general secretary, Confederation of All India Traders, said: “It is unfortunate that despite opposition from their own allies they have chosen to again reopen foreign investment into the sector. It is surprising the government has again reopened the sector without announcing any solid measures to protect small traders.”
“We will oppose this move even more strongly this time and are hopeful the government will roll back its decision just the way they did last time."
Sharan Lillaney, aviation analyst, Angel Broking, said, “FDI in aviation has always been approved, this is just an approval for foreign airlines. This was not something out of the extraordinary, so there is no question of it being reversed.”
“I don’t think there will be a flurry of investments, but airlines in better shape will definitely see interest from foreign airlines, such as SpiceJet, Indigo or Jet,” Lillaney said.