It’s not every day that India makes such a dramatic move as raising diesel prices, or allowing foreign direct investment in its debt-walloped passenger airlines. It’s certainly not every day that it caps this 24-hour period by allowing foreign investment in retail businesses.
In short, big international companies like Wal-Mart will be able to start their own shops in India, or will be able to buy up to 51 percent of existing retail businesses. This could affect small grocery stores like Nilgiris in southern India all the way down to local street vendors.
The Indian government made all these moves as part of increasingly urgent efforts to firm up its sagging economy. While the diesel price rise of 5 rupees a litre and the retail moves are sure to cause a lot of anger and pain on the part of many Indians, the government has suddenly revealed a desire to think about the collective future of the country.
While sceptics might expect the government to abandon moves that are politically risky, the ruling coalition that implemented the changes — particularly the coalition’s leader, the Congress Party — has silenced its worst critics. The timing isn’t bad either, considering recent corruption scandals that have cast doubt on the ability of the coalition to lead effectively.
So why all the activity all of a sudden? Asia’s third-largest economy was facing multiple threats of a credit rating downgrade. It also has its returning finance minister, P Chidambaram, back in control of the purse.