Parliament may be back in business, but that’s come at a steep cost for the UPA government and its reform agenda. On Wednesday, finance minister Pranab Mukherjee stood up before the Lok Sabha and announced the suspension of plans to allow 51% foreign investment in multi-brand retail He added that the government was waiting to build a consensus among stakeholders before rolling out that policy. What Mukherjee did not mention in his talk was the simultaneous decision to allow 100% FDI in single-brand retail chains. As of now, that particular move appears to still be in effect.
Opposition parties had loudly protested the decision to allow 51% FDI in multi-brand chains. They were joined by the Congress’s own UPA ally the Trinamool Congress and Parliament had been repeatedly adjourned over the issue.
And separately, finance minister Pranab Mukherjee has also announced the government will start implementing the new direct tax code from 1 April 2011. The code attempts to widen the tax base and replace profit-linked exemptions with investment-linked ones.
And finally, Indian shares swung back into the green on Wednesday, with rising expectations of a resolution to the European debt crisis. The Sensex rose 72 points to 16,877. And the Nifty went up 23 to 5,063.