During parliament debate in 2012, BJP had vehemently opposed foreign direct investment (FDI) in multi-brand retail (MBR) arguing that this would affect millions of traders besides small and medium enterprises. In run up to general elections, BJP’s prime ministerial candidate, Narendra Modi hinted at reviewing party’s stance when he opined that our traders should gear up to face competition from organized retail. He exuded confidence they can do! However, in its manifesto released on April 7, 2014 BJP categorically ruled out FDI in MBR while welcoming it in all other sectors to give a boost to jobs, build assets especially infrastructure and access to niche technology and special expertise. Now, Nirmala Sitharaman, Minister of State with independent charge (MoS-IC) for...
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Category: Foreign investment & other inflows
FDI in retail – Delhi Government’s volte face
AAP Government in Delhi has addressed a letter to Ministry of Commerce, Department of Industrial Policy & Promotion (DIPP) – nodal point for foreign direct investment (FDI) related issues – saying that it will not permit FDI in multi-brand retail. FDI in multi-brand retail has been on reforms agenda of UPA Government for several years now. Due to intense opposition from various quarters, it was forced to take a vote in Parliament which approved in November 2012 subject to foreign investor taking prior permission of concerned state. Delhi is one of the 9 Congress-ruled states including AP, Rajasthan (prior to Assembly elections held in November, 2013), Maharashtra etc which decided to go along. In this backdrop, decision of AAP Government...
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Indian corporates under FIIs ‘siege’
Conventional wisdom has it it, if economy is growing and corporate fundamentals are strong, investing public would getting attracted especially towards stocks of companies doing well and those who are partners in growth story. During last 4 years since 2010, Indian economy has been on a downward trajectory with GDP growth showing a decelerating trend to 6.2% in 2011-12; 5% during 2012-13 and further down to 4.4% & 4.8% during first and second quarter of 2013-14. Yet, acting in a contrarian mode, foreign investors have shown extraordinary interest in Indian stocks and resorted to aggressive buying spree. During 4 years ending December 2013, they have pumped around Rs 370,000 crores (US$ 60 billion). This is more than combined investment in...
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QE taper – Is India prepared to face onslaught?
The QE (quantitative easing) ‘tapering’ – though coming earlier than anticipated – has not led to the kind of turbulence that a mere indication/hint about this had led to in May, 2013. The impact on emerging market economies (EMEs) including India is minimal. Contrary to expectations that quantum of tapering would be steep viz., reduction in asset purchase by US$ 20-30 billion per month, US Fed has announced a reduction of US$ 10 billion a month – commencing January, 2014 – from current US$ 85 billion per month. The FOMC has also alluded to proposed wind down being ‘gradual’ and ‘calibrated’. Thus, unlike May when uncertainties gripped the scene, this time around there is an element ‘predictability’ and ‘certainty’. This...
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