The United Progressive Alliance (UPA) government’s efforts to roll out foreign direct investment (FDI) measures indicates their commitment towards resurrecting the Indian economy, which has witnessed the stalling of growth. At the same time, the clock is ticking with less than a year to go before the general elections in 2014. The government should have initiated the liberalisation process earlier, simply because right now, their steps seem to suggest that they are in damage control mode with an eye towards garnering positive opinion from the public, the markets and the country’s industrialists. The intention must be seen to be right, along with the action.
Prime Minister Manmohan Singh has taken over the reins to initiate this process, as at least a dozen sectors prepare for foreign investments — this includes the blue chip zones of defence and insurance. The sliding rupee must not go into a free fall. This explains the UPA’s sense of urgency. It must ensure that there are no grey areas in contractual fine prints which could force investors to pull out, or waver in their commitment. Allies must also be on board as false promises may come back to haunt the UPA.
Business processes must be smoothened. The government’s intentions must have clarity to ensure that the opposition does not disrupt proceedings by questioning their motives during the monsoon session of parliament.
This could be the UPA’s last roll of the dice. Singh and his cabinet could sink, or swim, with their latest manoeuvres.