Govt may allow FDI in multi-brand retailing

NEW DELHI: The government is looking at allowing foreign direct investment (FDI) in multi-brand retailing as part of a slew of measures to make India more attractive to overseas investors. 

Senior government officials told TOI that the thinking was that a gradual opening up would be a better strategy with global chains first allowed to open stores in metros, while wholesale cash-and-carry being limited to smaller towns and cities, at least for the moment. 

The move being piloted by the Department of Industrial Policy and Promotion is at the stage of discussion with political clearance yet to be accorded to the proposal. Once there is consensus on the issue within UPA, which is unlikely until elections in five states are over, states will need to be taken on board, a senior government official said. 

The Economic Survey, which was tabled in Parliament last month, had also suggested gradual opening up of the retail sector with the initial go-ahead limited to a few cities. 

At present, the government allows 51% FDI in wholesale cash-and-carry where global players such as Wal-Mart and Carrefour are only allowed to sell to bulk customers such as hotels, canteens and even local retailers. 

Officials said the move to open multi-brand retailing is part of the plan to "send the right signals to foreign investors", some of whom have chosen to stay on the sidelines since a string of scandals hit the headlines last year. 

By allowing greater FDI in some key sectors, the government will also be able to deal with the widening current account deficit. In fact, stepping up FDI was a key issue on the table of financial sector regulators — RBI, Sebi, Insurance Regulatory & Development Authority and the Pension Fund Regulatory & Development Authority — and finance ministry officials last week. The issue was discussed at the first meeting of the sub-committee of the Financial Stability and Development Council. 

Sources said by piloting the insurance and pension bills, the government would signal that it was still serious about reforms. 

There is also a move to amend the Factories Act and raise the FDI ceiling for defence production to 74% from 26%. 

While the Department of Industrial Policy and Promotion had floated consultation papers for allowing FDI in multi-brand retail and raising the cap for defence production, the government is yet to thrash out a consensus. 

The government's appetite for reforms is being driven by dwindling FDI flows. According to latest data, inflows declined 23% to $16 billion during April-December 2010, compared to nearly $21 billion in the same year ago period. 

The government's assessment is that some of the current account deficit would be trimmed once funds to set up the Posco steel plant in Orissa, an investment of $13 billion, starts flowing in. BP's proposal to acquire stake in Reliance's oil and gas blocks and the joint venture with the Mukesh Ambani-controlled company are also going to help FDI flows with around $14 billion.

Source: http://timesofindia.indiatimes.com/business/india-business/Govt-may-allow-FDI-in-multi-brand-retailing/articleshow/7667370.cms

Assembly polls: Cong's Bengal ambition faces Mamata wall

The assembly elections are turning out to be a big headache for the Congress. The party may have stitched up a seat-sharing deal with their southern partners, theDMK, but trouble looms large on the eastern front.

The Trinamool Congress, the second largest party in the UPA coalition at the Centre, is not keen to part with more seats for the Congress in the six-phase West Bengal elections, which are scheduled to begin from April 18.

The Congress has asked for at least 98 seats in the poll for the 294-member assembly. But, the Trinamool, which has a larger electoral base in the state, is in no mood to relent. The party has offered its senior partner in the UPA just 58 seats, sources said.

Manas Bhunia, the president of the West Bengal Pradesh Congress Committee (WBPCC), has been camping in New Delhi for the past week. He wants to mobilise the party high command's support to drive a hard bargain with the Mamata Banerjee-led Trinamool.

The two parties have had several rounds of meetings in the Capital over the last three days.

While both parties are keen to iron out differences, sources in the Congress said Bhunia is not happy with Mamata's claim that the Congress should not ask for more than 42 seats since each Lok Sabha constituency includes seven assembly segments.

The WBPCC chief has held meetings with senior Congress leaders, including Rahul Gandhi, Ahmed Patel, Janardhan Poojary and Pranab Mukherjee. He is also under pressure from senior state Congress leaders, who are demanding at least 120 seats.

Om Prakash Mishra, WBPCC general secretary and spokesperson, said on Tuesday evening, that WBPCC members and Congress MPs from the state held a three-and-a-half-hour long meeting with Shakeel Ahmed where it was resolved that there is need for a broader understanding on the need for an alliance with the Trinamool.

"We also held a meeting on Monday with Poojary, the chairman of the screening committee," Mishra said. "This is the first time the high command is spending so much time in the selection process of candidates." Mamata, who met Mukherjee on Monday, has reportedly told the Congress leadership that her party has widened its electoral base across the length and breadth of the country in the last two years.

The Trinamool chief also reportedly spoke to Congress president Sonia Gandhi on Monday on the issue of seat sharing.

In Kolkata, Mamata's bête noire and West Bengal chief minister Buddhadeb Bhattacharjee declared war on her party while kicking off the Left Front's election campaign.

Bhattacharjee said the Trinamool's nexus with the Maoists has set an awful example of cheap politics, and is a threat to the country's internal security. "I guarantee that our government is committed to crushing the Maoist uprising in the state," he said on Tuesday afternoon.

"We are the pioneers of land reforms in the country, we have given land to the landless," the CM claimed, adding that it is because of the Left Front's good work that the state was now self sufficient in rice, fish, vegetable and jute production.

Bhattacharjee began the campaign with two public meetings - at his constituency in Jadavpur and at Maheshtala in South 24-Parganas.

"It would be catastrophic for the state if she (Mamata) comes to power," the chief minister said, adding that the railway minister's promises are never implemented.

The chief minister raised doubts about the railway projects Mamata had promised the state in last year's railway Budget. "Have you seen any progress with the railway projects? How can the railway ministry set up industries?" he asked.

Source: http://indiatoday.intoday.in/site/Story/131887/top-stories/congress-trinamool-talk-seat-sharing-for-west-bengal-polls.html