Saturday, December 8, 2012

FDI to bring new technology in agriculture, says Prime Minister

A day after the UPA government won Parliament's approval on its proposal to allow foreign direct investment or FDI in multi-brand retail, Prime Minister Manmohan Singh has said FDI will create a revenue model for farmers.

"FDI has been passed by Parliament and it was strongly supported by organisation in Punjab. Agriculture and food retail business will be benefited by it, farmers and consumers will be benefited by FDI," the Prime Minister said in Ludhiana today at the convocation of the Punjab Agricultural University.

"The policy will introduce new technology and investment in marketing agricultural produce," he added.

The government's decision to allow foreign supermarkets such as Wal-Mart Stores Inc to set up shop in India has been a contentious one. The Opposition, led by the BJP, had opposed it vehemently and even forced the government to go for a debate and vote in Parliament.

The government won the vote in both the Houses with the help of Mulayam Singh Yadav's Samajwadi Party and Mayawati's Bahujan Samaj Party. While both the parties walked out ahead of the voting in Lok Sabha, Mayawati's 15 MPs voted in favour of the government in the Upper House.

The government hailed the victory in Parliament with Parliamentary Affairs Minister Kamal Nath saying, "This is the victory for more reforms. In the following week we will bring more financial legislation on economic reforms. Our reforms are on track." Although both votes were non-binding, a defeat would have piled pressure on Dr Singh to roll back the measure. Prime Minister Manmohan Singh's administration is now expected to turn its attention to pushing more reforms, including raising foreign investment caps in the insurance and pension sectors.

FDI in multi-brand retail will allow global retail giants such as Wal-Mart to set up shop in the country's $450 billion (Rs. 2,500 crore) retail sector, and is aimed at drawing more overseas investment and taming inflation.

In the shrinking window before a general election that is due in just over a year, Dr Singh's government - in a minority since the Trinamool Congress exited in September to protest against tough reform measures - wants to push reforms such as allowing more foreign investment in its insurance and pension sectors, and simplifying tax laws.