Less than 24 hours before Mamata Banerjee’s Trinamool Congress was due to walk out of the UPA, the government Thursday went ahead and notified its decision to allow FDI in multi-brand retail, among others, reflecting its resolve to stick to its reform announcements despite the threat to its stability.

The Department of Industrial Policy and Promotion (DIPP) also notified the Cabinet decisions on liberalising FDI norms in single-brand retail and the aviation sector, as well as changes announced for investment in broadcasting and power exchanges.

The move came at the end of a day when opposition parties tried to shut the country down by calling a Bharat bandh to oppose the diesel price increase and FDI announcements. The DMK, a key UPA ally, supported the bandh. The Trinamool wants the government to reverse the announcements by Friday, failing which its ministers will quit and the party will pull out of the alliance.

While the government has refused to reconsider the decisions, Prime Minister Manmohan Singh is expected to issue a statement or even address the nation on Friday to explain the rationale behind them, government sources said.

In a late night statement on her Facebook page, Banerjee said that she had come to know through the media about the government’s decision to notify the FDI decision. “Is it ethical, moral and democratic for a minority government to issue Government order forcefully and hurriedly, when massive protest against it is taking place across the country?

This action by a minority government questions its credibility,” she said, and added, “shocking at midnight...”

Among the decisions notified Thursday, the one on multi-brand retail says that while 51 per cent FDI has been allowed under the approval route, the decision to implement it has been left to the states and union territories. So far, 10 states and UTs including Andhra Pradesh, Assam, Delhi, Haryana, Jammu & Kashmir, Maharashtra, Manipur, Rajasthan and Uttarakhand have conveyed their agreement to the policy.

“The policy is an enabling policy only and the state governments/union territories would be free to take their own decisions in regard to implementation of the policy. Therefore, retail sales outlets may be set up in those states/union territories which have agreed, or agree in future, to allow FDI under this policy,” the notification said.

The DIPP also notified 100 per cent FDI in single-brand retail after diluting norms related to 30 per cent sourcing from micro, small and medium enterprises. It said that for proposals involving FDI higher than 51 per cent, “sourcing of 30 per cent of the value of goods purchased, will be done from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen, in all sectors”. These products will be sold under the same single brand sold internationally.

The government also made other changes in sourcing norms for FDI in both multi-brand and single-brand retail. Under the changes, investors will have to meet the 30 per cent sourcing requirement as an average of five years’ total value of manufactured products, beginning April 1 of the year during which the first tranche of FDI is received. On the other hand, the government has prohibited retail trading through e-commerce in any form.

Foreign airlines have been allowed to invest up to 49 per cent in Indian airlines operating scheduled and non-scheduled air transport services. Besides, the decisions on permitting 49 per cent FDI in power exchanges and an increase in the foreign equity cap to 74 per cent from 49 per cent in service providers such as DTH in the broadcasting sector was also notified. (Indian Express)