Thursday, December 15, 2011

FDI debacle: Inadequate preps, allies with cold feet, says PM












New Delhi:  In an interview to Bloomberg, the Prime Minister has spoken about the factors that forced his government to suspend its reforms in retail.

"There was inadequate preparation and some partners in the coalition developed cold feet," Mr Singh told Bloomberg. "But I can assure you, India remains committed to a system of regulation that is supportive of enterprise and we will do everything to encourage foreign investment."

The PM said that he hopes to revisit reforms in retail after March, by which time states like UP will have voted. "We have to convince our allies. I feel we will succeed, though not in the next two months. The state elections should be over by March and things should change"

His government was forced to suspend its decision to allow 51 per cent foreign direct investment in multi-brand retail after Mamata Banerjee, a key member of the ruling UPA,  objected to the policy.  The DMK, which like Ms Banerjee is a partner in the UPA, had also opposed the reforms, but had said it would support he government in a vote in parliament.

 "The PM also said that he expects inflation to slide to between 6 and 7 per cent, growth to return to 9 per cent.   He said he does not believe that investor confidence will be impacted by the weaker rupee. 

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