FDI in five more sectors

     New Delhi: In a landmark initiative, the Union Cabinet on Tuesday night announced wide-scale reforms in the country's retail sector and said that it would be opening up five more sectors to Foreign Direct Investment (FDI). Addressing reporters after a meeting of the Cabinet Committee on Economic Affairs (CCEA), Union Commerce and Industry Minister Kamal Nath said: "This is first time in fifteen years that the whole FDI policy has been reviewed in an integrated manner to remove anomalies and inconsistencies in the policy." Nath said that the CCEA has given its approval to 51 percent FDI in single brand retailing, which would benefit commercial conglomerates like Reebok and Louis Vuitton. He also said that the CCEA had cleared 100 percent FDI cap in captive coal and lignite mining, petroleum marketing infrastructure, power trading, coffee and rubber processing and warehousing, diamond precious stones and mining exploration, market study, financing in the petroleum sector and laying of Liquefied Natural Gas (LNG) pipelines.

    The Minister also said that the FDI in new Greenfield airport projects has been increased from 74 percent to 100 percent. Speaking about Bihar Governor Buta Singhs indictment by a five- judge Supreme Court bench in connection with the May 2005 dissolution of the Bihar State Assembly, Union Home Minister Shivraj Patil said that the Central Government would issue a comprehensive statement in a day. He, however, highlighted the fact that the Cabinet felt that the apex court bench appeared to be divided on the issue, as three of the judges had given a majority opinion, while two had given a minority response. He also said that the Cabinet has decided to depute a commercial representative in Karachi almost five years after withdrawing the facility. Tuesday night's economic-related Cabinet declarations are likely to stir another political storm within the ruling coalition, which is led by Prime Minister Dr. Manmohan Singh, as the Left parties, which extend outside support, are likely to give an aggressive response to it on Wednesday.

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