NDA govt wanted 100% retail FDI in 2002

NEW DELHI: The erstwhile NDA government, headed by critics of Manmohan Singh government’s FDI policy, had mooted 100% foreign equity in retail in 2002.

The Cabinet note prepared by then commerce minister Murasoli Maran of DMK, which too now opposes retail FDI, argued that foreign participation in the sector would improve the country’s foreign investment outlook, besides creating employment in rural India. Incidentally, it is the same argument that the UPA government has propounded to defend its decision to allow FDI into retail.

The Maran draft had not made any distinction between singlebrand and multi-brand trading. The Vajpayee Cabinet, which vetted the note, had formed a sub-committee under the then finance minister Yashwant Sinha to deliberate the issue. The NDA government had favoured opening up of various sectors in the economy to FDI.

A governance charter prepared by NDA managers in 2004 had promised 26% FDI in retail sector. “Organised retail trade on the international pattern will be promoted as a new engine of growth for trade and employment through appropriate legal and fiscal measures. 26% FDI in retailing will be allowed. Sourcing or Indian products by foreign retail chains will be encouraged,” the 2004 document had said.