New Delhi, Sep 14 (IANS) by the Cabinet Committee on Economic Affairs chaired by Prime Minister Manmohan Singh.
The announcement paves the way for global retail giants like Walmart and Carrefour to open their stores in India.
The minister said the decision was first taken in November last year but subsequently held back following opposition mainly from the Left, BJP and the Trinamool Congress. But it was "never rolled back", Sharma clarified.
He said since then the government had held intense discussions with various stakeholders with a view to creating broad consensus. "Ten months is not a sudden decision." He said among those who were spoken to were farmers associations, civil society groups, regional chambers of commerce and industry as well as state governments.
"I had personally written to every chief minister of the country, spoken to almost all of them. There are states which reacted to the proposal very well, some expressed opposition. The response has been a mixed one."
The government said that states which did not favour 51 percent FDI in multi-brand retail were free not to implement the policy. According to the government, the move comes with some conditions for the investors.
Sharma said multi-brand FDI was expected to generate a large number of jobs in rural India besides giving remunerative prices to farmers for their products.
Political critics were not impressed.
The BJP, whose opposition to the coal block allocations paralysed parliament's monsoon session, vowed to unleash nationwide protests against the FDI unveiling. This comes a day after the government hiked diesel prices by Rs.5 a litre and limited subsidized cooking gas cylinders to six per year per family.
Those decisions sparked off a volley of protests across all strata of society who fear a cascading price rise.
Minister Sharma, however, denied that the FDI decision was aimed at erasing an impression that the government, under attack over corruption, had gone into a shell. "There was never any policy paralysis," he said.
India allows FDI in multi-brand retail
New Delhi, Sep 14 (IANS) Just a day after announcing the steepest ever hike in diesel price, the government Friday took another politically contentious decision of allowing overseas investments in multi-brand retail.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Manmohan Singh, decided to allow up to 51 percent foreign direct investment (FDI) in multi-brand retail.
This paves the way for the global retail giants like Walmart and Carrefour to open their stores in India.
The cabinet, in November last year, had decided to allow up to 51 percent FDI in multi-brand retail. But the move was kept in abeyance following protests from opposition as well as some of the allies of the ruling United Progressive Alliance (UPA), especially the Mamata Banerjee-led Trinamool Congress.