News / Asia

Indian Government Plans Bold Economic Measures

Indian Commerce Minister Anand Sharma addresses a press conference in New Delhi, India, November 25, 2011.
Indian Commerce Minister Anand Sharma addresses a press conference in New Delhi, India, November 25, 2011.
Anjana Pasricha
In India, the government is not likely to back down from a series of sweeping economic reforms it has announced, despite stiff political opposition. The reforms are expected to invigorate the country’s flagging economy and salvage the reputation of a government widely criticized for a paralysis in policy-making.

The decision to allow foreign supermarket chains such as Walmart and Tesco to set up shop in India is the boldest and most contentious reform measure taken by the government. But it is not the only one.

Authorities have also permitted foreign airlines to buy stakes in local carriers, raised the limit for investment by overseas companies in broadcasting and decided to sell stakes in four state-owned industries. It has also hiked diesel prices.      

The scale and speed with which the stalled reforms were announced last Friday surprised a country where the government has long dithered over such measures because of stiff political opposition.

Ambitious reforms

Commerce and Industry Minister, Anand Sharma, hopes the ambitious reforms will silence doubters and “those who projected India in a bad light.” He says there is no question of turning back.       

“We have sent a very clear message that this government thinks of India’s interest, its growth, its development, its job creation, wealth generation, infrastructure development. We have taken decisions which have resonated globally,” says Sharma.

A political storm is already brewing around the decision to allow foreign supermarkets to have a 51-percent stake in Indian ventures and the hike in diesel prices. Nationwide shutdowns and protests have been planned later this week.

A key ally, the Trinamool Congress, has warned it could withdraw from the government. Opposition political leaders have hinted at early elections if the coalition is not able to hold together.

Foreign supermarkets

Critics of the measure fear that foreign stores such as Walmart will put tens of thousands of small shops out of business and jeopardize jobs.  

“This would very seriously impinge upon the employment potential and earning potential of small retailer and traders in India,” says Ravi Shankar Prasad, a spokesman of the Bharatiya Janata Party, or BJP.

To tone down that opposition, the government says states opposed to the measure can opt out. Several large states, such as West Bengal, Bihar, Gujarat and Uttar Pradesh - governed by regional parties - have already said they will not allow foreign supermarkets to enter.

But political analysts say this time the government will not back down from rolling out the measure, as it did last year, following an outcry by its allies.

Independent analyst Prem Shankar Jha says the government took the bold steps both to revive India’s tanking economy and to ward off accusations of paralysis in policy making.   

“They are going straight ahead," says Jha. "There is a feeling that we will go down if we do nothing, and if we have to go down we better go down fighting, and that the goal of the BJP is to force us to be paralyzed, so they can wave our paralysis in front of the electorate.” 

Stalled economy

There are hopes that the slew of measures will invigorate the slowing economy.

The opening of the country’s $450 billion retail sector could bring in much-needed foreign investment into the country. The reform of the aviation sector will help domestic airlines, which are struggling with high debt. And lowering subsidies on diesel will help the government reduce its fiscal deficit.

However, India’s Reserve Bank left interest rates unchanged Monday despite many calls by businesses to cut borrowing rates to revive growth.   

India’s economy has slowed to 5.5-percent growth and there are growing worries that the country is losing its allure for investors as an attractive emerging economy.

You May Like

Australia-Cambodia Resettlement Agreement Raises Concerns

Agreement calls for Cambodia to accept refugees in return for $35 million in aid and reflects Australia’s harder line approach towards asylum seekers and refugees More

India Looks to Become Arms Supplier Instead of Buyer

US hopes India can become alternative to China for countries looking to buy weapons, but experts question growth potential of Indian arms industry More

Earth Day Concert, Rally Draws Thousands in Washington

President Obama also took up the issue Saturday in his weekly address, saying there 'no greater threat to our planet than climate change' More

This forum has been closed.
Comment Sorting
Comments
     
by: sudeep paralkar from: india
September 18, 2012 1:46 AM
Government of India has indeed taken very bold steps.Allowing FDI in key sectors like Retail and Aviation would bring in much needed liquidity and boost the economy.The massive retail sector in India which is valued at over 500 Billion Dollars is fragmented and supply chain,logistics,warehouse management can be improved.The agriculture sector would benefit substantially from retail reforms.In India millions of tons of agricultural products rot annually due to lack of proper warehouses.Farmers would benefit by directly dealing with retailers.the middle agents which loots farmers would cease to exist.I WONDER WHY THERE IS OPPOSITION.I foresee GDP growth rate of over 7 % next year.couple of years from now 9 % growth provided reforms are sustained and continued over period of time.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Are Energy Needs Putting Thailand's Natural Beauty at Risk?i
X
Steve Sandford
April 17, 2015 12:50 AM
Thailand's appetite for more electricity has led to the construction of new dams along the Mekong River to the north and new coal plants near the country's famous beaches in the south. A proposed coal plant in a so-called "green zone" has touched off a debate. VOA's Steve Sandford reports.
Video

Video Are Energy Needs Putting Thailand's Natural Beauty at Risk?

Thailand's appetite for more electricity has led to the construction of new dams along the Mekong River to the north and new coal plants near the country's famous beaches in the south. A proposed coal plant in a so-called "green zone" has touched off a debate. VOA's Steve Sandford reports.
Video

Video Overwhelmed by Migrants, Italy Mulls Military Action to Stabilize Libya

Thousands more migrants have arrived on the southern shores of Italy from North Africa in the past two days. Authorities say they expect the total number of arrivals this year to far exceed previous levels, and the government has said military action in Libya might be necessary to stem the flow. VOA's Henry Ridgwell reports.
Video

Video Putin Accuses Kyiv of ‘Cutting Off’ Eastern Ukraine

Russian President Vladimir Putin, in his annual televised call-in program, again denied there were any Russian troops fighting in Ukraine. He also said the West was trying to ‘contain’ Russia with sanctions. Henry Ridgwell reports on reactions to the president’s four-hour TV appearance.
Video

Video Eye Contact Secures Dog's Place in Human Heart

Dogs serve in the military, work with police and assist the disabled, and have been by our side for thousands of years serving as companions and loyal friends. We love them. They love us in return. VOA’s Rosanne Skirble reports on a new study that looks at the bio-chemical bond that cements that human-canine connection.
Video

Video Ukrainian Volunteers Search for Bodies of Missing Soldiers

As the cease-fire becomes more fragile in eastern Ukraine, a team of volunteer body collectors travels to the small village of Savur Mohyla in the what pro-Russian separatists call the Donetsk Peoples Republic - to retrieve bodies of fallen Ukrainian servicemen from rebel-held territories. Adam Bailes traveled with the team and has this report.
Video

Video Xenophobic Violence Sweeps South Africa

South Africa, long a haven for African immigrants, has been experiencing the worst xenophobic violence in years, with at least five people killed and hundreds displaced in recent weeks. From Johannesburg, VOA’s Anita Powell brings us this report.
Video

Video Sierra Leone President Koroma Bemoans Ebola Impact on Economy

In an interview with VOA's Shaka Ssali on Wednesday, President Ernest Koroma said the outbreak undermined his government’s efforts to boost and restructure the economy after years of civil war.
Video

Video Protester Lands Gyrocopter on Capitol Lawn

A 61-year-old mailman from Florida landed a small aircraft on the Capitol lawn in Washington to bring attention to campaign finance reform and what he says is government corruption. Wednesday's incident was one in a string of security breaches on U.S. government property. Zlatica Hoke reports the gyrocopter landing violated a no-fly zone.
Video

Video Apollo 13, NASA's 'Successful Failure,' Remembered

The Apollo 13 mission in 1970 was supposed to be NASA's third manned trip to the moon, but it became much more. On the flight's 45th anniversary, astronauts and flight directors gathered at Chicago's Adler Planetarium to talk about how the aborted mission changed manned spaceflight and continues to influence space exploration today. VOA’s Kane Farabaugh reports.
Video

Video Badly Burned Ukrainian Boy Bravely Fights Back

A 9-year-old Ukrainian boy has returned to his native country after intensive treatment in the United States for life-threatening burns. Volodia Bubela, burned in a house fire almost a year ago, battled back at a Boston hospital, impressing doctors with his bravery. Faith Lapidus narrates this report from VOA's Tetiana Kharchenko.
Video

Video US Maternity Leave Benefits Much Less Than Many Countries

It was almost 20 years ago that representatives of 189 countries met at a UN conference in Beijing and adopted a plan of action to achieve gender equality around the world. Now, two decades later, the University of California Los Angeles World Policy Analysis Center has issued a report examining what the Beijing Platform for Action has achieved. From Los Angeles, Elizabeth Lee has more.
Video

Video Endangered Hawaiian Birds Get Second Chance

Of the world's nearly 9,900 bird species, 13 percent are threatened with extinction, according to BirdLife International. Among them are two Hawaiian honeycreepers - tiny birds that live in the forest canopy, and, as the name implies, survive on nectar from tropical flowers. Scientists at the San Diego Zoo report they have managed to hatch half a dozen of their chicks in captivity, raising hopes that the birds will flutter back from the brink of extinction. VOA’s George Putic reports.
Video

Video Exhibit Brings Renaissance Master Out of the Shadows

The National Gallery of Art in Washington has raised the curtain on one of the most intriguing painters of the High Renaissance. Mostly ignored after his death in the early 1500s, Italian master Piero di Cosimo is now claiming his place alongside the best-known artists of the period. VOA’s Ardita Dunellari reports.
Video

Video Sidemen to Famous Blues Artists Record Their Own CD

Legendary blues singer BB King was briefly hospitalized last week and the 87-year-old “King of the Blues” may not be touring much anymore. But some of the musicians who have played with him and other blues legends have now released their own CD in an attempt to pass the torch to younger fans... and put their own talents out front as well. VOA’s Greg Flakus has followed this project over the past year and filed this report from Houston.
Video

Video Iran-Saudi Rivalry Is Stoking Conflict in Yemen

Iran has proposed a peace plan to end the conflict in Yemen, but the idea has received little support from regional rivals like Saudi Arabia. They accuse Tehran of backing the Houthi rebels, who have forced Yemen’s president to flee to Riyadh, and have taken over swaths of Yemen. As Henry Ridgwell reports for VOA, analysts say the conflict is being fueled by the Sunni-Shia rivalry between the two regional powers.

VOA Blogs