In a dramatic push to reverse India’s economic decline, the UPA government, which had been under fire for holding back reforms, allowed 51 percent foreign direct investment (FDI) in multi-brand retail and opened up the aviation sector to 49 percent investment by foreign airlines. It also cleared stake sales in four public sector firms to raise Rs 15,000 crore, among others.
The reforms brought cheer to the market with the Sensex logging its highest single-day gain this year. However, the ruling party faced stiff resistance from opposition parties like the BJP which tried to block the road to reforms fearing loss of jobs in the name of removing middlemen, selling cheap initially and then gradually increasing the prices to finish competition. If this was not enough the Congress also saw its coalition partners like the Trinamool Congress walk out of the government over the issue.
Nevertheless, the government managed to win the motion against FDI in retail in the winter session of Parliament thereby allowing global names like Carrefour, Tesco and Wal-Mart set up stores in India.