UPA wins FDI vote in Lok Sabha

Tags: FDI, Lok sabha, UPA, News
The fragile ruling UPA coalition won a vote on allowing foreign supermarkets to operate in Asia's third-largest economy in a test of support for Prime Minister Manmohan Singh's minority government and his flagship economic reform.

The victory gives Singh a much-needed boost at a time when he is trying to drive a second wave of economic reforms through a fractious parliament. The debate over retail reform has proved a costly distraction for the government and has already eaten up two weeks of the month-long parliamentary session.

The vote now clears the way for voting on bills aimed at attracting foreign investment to the ailing pension and insurance industries, two measures seen by financial markets as important steps towards further liberalising an economy in the midst of a slowdown.

Expectations the government would win drove the stock market to a 19-month high on Wednesday.

The vote in the Lok Sabha - which the government won thanks to abstentions by two powerful regional parties - was non-binding. However, a loss would have made it harder for Singh to defend the policy to bring global chains such as Wal-Mart Stores Inc. (WMT.N) to India's $450 billion retail sector.

Under threat of losing India's investment grade credit rating, and facing the prospect of fighting a general election during the worst growth slump in a decade, Singh launched the policy amid a flurry of long-delayed reforms in September.

Money has flowed into India's capital markets since, and Goldman Sachs last week upgraded India's outlook, but formidable hurdles remain to get the economy back on track.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • The NDA government would do well to keep its economic focus in place

    It is as if the worst horrors conjured by liberal secularists about India’s prime minister could be finally coming true.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Urs Schöttli

Shifting sands in the Far East

As was to be expected, Japanese prime minister Shinzo Abe ...

Zehra Naqvi

When humanity died, bestiality prevailed

The terrorist attack that killed 132 children in Peshawar has ...

Bubbles Sabharwal

Why self-esteem must be your best friend forever

Two negatives do make a positive! Imagine no doubts, no ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture