Govt assures industry of consensus on retail FDI

With economic growth numbers belying the government’s hopes, Commerce and Industry Minister Anand Sharma on Monday reached out to industry chambers, acknowledging that the current investor sentiment in the country was low.

He sought to clarify that there was no policy paralysis in the government, and that talks were on with stakeholders to bring back FDI in the multi-brand retail.

“There is low investors’ sentiments in the country, but no policy paralysis,” Sharma told reporters after the meeting with members of the CII and Ficci, convened in the wake of industrial production contracting 5.1 per cent in October — for the first time since the global financial crisis period.

Well aware that the government cannot control inflation through RBI’s monetary tools only, the Centre tried to inbuilt a supply-augmenting mechanism in the economy by opening multi-brand retail to 51 per cent FDI, but vehement opposition from the Opposition and even some of the UPA allies forced it to hold back the decision.

“The government is committed for the reform agenda,” Sharma said. “There is only a suspension, there is no rollback of the decision. We will be talking once again (with the stakeholders).”

Sharma said that as far as his ministry is concerned, the decision to allow FDI in the sector was “well thought out” and was taken after intense consultations with all the stakeholders including SMEs, states and farmer associations. “Let’s remain optimistic that we will be able to ensure that there is a larger support,” he said.

Sharma also said the meeting reviewed the progress of several mega projects in sectors like power.

“Industry feels and the government also accepts that it (mega projects) should be regularly monitored so that the project approvals are put on a fast track,” he said.

Noting that the industry has expressed concern over rising cost of credit and rupee depreciation, he said the finance ministry and the RBI are seized of the matter. After hiking policy rates 13 times, the central bank had last week pressed a pause button, responding to the needs of growth in the economy.

The government has already extended two per cent interest sub-vention for some labour-intensive sectors till the end of the current fiscal. The Cabinet has cleared the national manufacturing policy that would expedite capital formation in the country when implemented.

As for the Indian economy, it grew slowest in nine quarters — at 6.9 per cent — in July-September period of this fiscal.