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'FDI relaxation to help attract foreign investors'

'FDI relaxation to help attract foreign investors'

New Delhi-Govt clears 49% FDI in Air India under approval route, foreign investment norms also eased for construction sector.In a major reforms, Government allows 100% FDI in single-brand retail via automatic route.Cabinet gave its approval to a number of amendments in the Foreign Direct Investment Policy.

He has said that the government is taking the plea of huge loss Air India is being burdened with to justify its move, but the Centre is seeking to hide the fact that the carrier has been pushed to this situation not because of its management's failure but owing to "imposition of disastrous decisions on the company by successive governments at the Centre". The sudden changes may help India's rank for ease of doing business go up a few notches and cash inflows may make things look better, but what about the resultant and adverse consequences in the long term for the unprotected Indian domestic market?

"By permitting FDI up to 100 per cent under automatic route in single brand retail trading, the government has eliminated the time lag for foreign investor to set up a single brand retail operations in India", said Dev Raj Singh, Executive Director, Tax & Economic Policy Group, EY India.

"It has been made a decision to clarify that real-estate broking service does not amount to real estate business and is therefore, eligible for 100% FDI under automatic route", the statement said.

"This breakthrough will open up millions of new employment opportunities, a push to investment activity in the economy and expansion in economic growth trajectory in the coming times", he said.

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Swadeshi Jagran Manch has also expressed its deep displeasure about government decision to allow 40% foreign investment in Air India.

"Allowing 100 per cent FDI in single-brand retail trade will further increase the hardship of traditional retail trade sector which is the second biggest livelihood giver after agriculture and expedite the ruin of the traditional retail trade sector", Sen said.

Air India had a total debt of about Rs 48,877 crore at the end of March 2017, of which about Rs 17,360 crore was aircraft loan, and Rs 31,517 crore for working capital.

Currently, the policy provides for 49 percent FDI under automatic route in power exchanges.

This is unedited, unformatted feed from the Press Trust of India wire.