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FDI rules relaxed, debt-ridden Air India opened for foreign investment

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Modi govt relaxes FDI rules, will allow foreign airlines to invest in Air India

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Narendra Modi Cabinet approves slew of changes in FDI rules, 100 per cent FDI through automatic route in single brand retail allowed

Over three years after it took a strong position against the then Dr Manmohan Singh-led UPA government’s decision for allowing foreign direct investment in various sectors, including single and multi-brand retail, the BJP under Prime Minister Narendra Modi appears to be going all out to promote foreign investment in various sectors of India’s stagnating economy.

On Tuesday, a meeting of the Union Cabinet chaired by the Prime Minister decided to substantially relax rules for FDI in a host of sectors, including single brand retail trading (SBRT), construction and civil aviation. The Cabinet has approved amendments to the Centre’s FDI policy in the civil aviation sector, paving the way for a liquidity infusion in the cash-strapped national carrier – Air India – which was hitherto excluded from the list of India’s airline operators in which FDI was allowed.

“As per the extant policy, foreign airlines are allowed to invest under Government approval route in the capital of Indian companies operating scheduled and non-scheduled air transport services, up to the limit of 49 per cent of their paid-up capital. However, this provision was presently not applicable to Air India, thereby implying that foreign airlines could not invest in Air India. It has now been decided to do away with this restriction and allow foreign airlines to invest up to 49 per cent under approval route in Air India,” an official statement from the government said after the Cabinet meeting.

The Cabinet has decided that FDI in the debt-ridden Air India will be permitted on the condition that it does not exceed 49 per cent either directly or indirectly and that “substantial ownership and effective control of Air India shall continue to be vested in Indian National.”

The Centre has sought to justify its move claiming that the relaxation of FDI norms would help provide ease of doing business and lead to larger foreign investment inflows.

The Prime Minister and his cabinet seem to have realised that FDI is a major driver of economic growth and a source of non-debt finance for the economic development of the country. It is pertinent to recall that while the BJP was in Opposition and Modi was chief minister of Gujarat, he along with Arun Jaitley and Sushma Swaraj – then Leaders of Opposition in the Rajya Sabha and Lok Sabha respectively – had led the saffron party’s charge against the UPA government’s FDI policy.

Now, at a time when the country’s GDP seems to be on a steady decline amid projections of continuing stagnation in the domestic economy owing to disruptions caused by the Goods and Services Tax (GST) rollout, the Modi government is going all out to embrace a tool on boosting investment inflows that it had once vociferously decried for being against the interests of India.

Besides opening up Air India for FDI, the other key decision taken at Tuesday’s Cabinet meet was the red-carpet rollout for foreign investment in single brand retail trading.

“Extant FDI policy on SBRT allows 49 per cent FDI under automatic route, and FDI beyond 49 per cent and up to 100 per cent through Government approval route. It has now been decided to permit 100 per cent FDI under automatic route for SBRT,” the official statement said.

“It has been decided to permit single brand retail trading entity to set off its incremental sourcing of goods from India for global operations during initial 5 years, beginning 1st April of the year of the opening of first store against the mandatory sourcing requirement of 30 per cent of purchases from India. For this purpose, incremental sourcing will mean the increase in terms of value of such global sourcing from India for that single brand in a particular financial year over the preceding financial year, by the non-resident entities undertaking single brand retail trading entity, either directly or through their group companies. After completion of this 5 year period, the SBRT entity shall be required to meet the 30 per cent sourcing norms directly towards its India’s operation, on an annual basis,” the government said.

On FDI in the construction sector, the government said: “It has been decided to clarify that real-estate broking service does not amount to real estate business and is therefore, eligible for 100 per cent FDI under automatic route.”

The cabinet also decided to allow FIIs/FPIs to invest in power exchanges through primary market as well. So far 49 per cent FDI was permitted under automatic route in power exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010 but FII/FPI purchases were restricted to secondary market only.

The Centre has also decided to relax the rules followed for approval of FDI proposals that are moved in the automatic route sectors.

As per the existing procedures, FDI applications involving investments from Countries of Concern, requiring security clearance as per the extant FEMA 20, FDI Policy and security guidelines are to be processed by the Union home ministry for investments falling under automatic route sectors. Cases pertaining to government approval route sectors requiring security clearance are processed by the respective administrative ministries.

“It has now been decided that for investments in automatic route sectors, requiring approval only on the matter of investment being from country of concern, FDI applications would be processed by Department of Industrial Policy & Promotion (DIPP) for Government approval,” the Cabinet press note said.

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Akhilesh Yadav says BJP orchestrated Sambhal violence to cover up byelection malpractice

He said that impartial investigations would reveal that many voters were unable to cast their ballots and that someone else had fraudulently voted in their place.

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Samajwadi Party chief Akhilesh Yadav on Sunday accused the BJP government of orchestrating the violence in Uttar Pradesh’s Sambhal district during a mosque survey, claiming it was a ploy to distract from electoral malpractice.

Yadav, the former chief minister of Uttar Pradesh, also alleged incidents of electronic booth capturing during the recently concluded bypolls for nine Assembly seats in the state, suggesting that a forensic examination of the electronic voting machines (EVMs) by the Election Commission could provide clarity on the situation.

Earlier in the day, the Uttar Pradesh Police used tear gas to disperse the crowd after it got violent and started stone pelting as tension escalated during a second survey of the Mughal-era mosque, claimed to be originally the site of an ancient Hindu temple. At least ten people were detained following the violent clash.

The local administration said that a second survey, led by an “Advocate Commissioner” as part of a court-mandated examination of the disputed area, commenced around 7 AM, attracting a gathering crowd.

Yadav made the statement a day after the results of the UP bypolls, where the Samajwadi Party secured only two seats, while the BJP and its ally, the RLD, won seven, including the Kundarki seat, which has a significant Muslim population.

“A serious incident took place in Sambhal, where a survey team was intentionally sent in the morning to disrupt election discussions. Their goal was to create chaos and prevent any debate on election-related issues,” Yadav claimed.

He said that several individuals were injured in the Sambhal violence, with one fatality, and questioned the need for a new survey conducted without proper preparation, especially when a previous survey had already been completed.

The Samajwadi Party chief said, “I won’t delve into legalities, but the other side wasn’t given a fair hearing. This was clearly designed to incite emotions and distract from conversations about electoral fraud.”

Yadav asserted that the events in Sambhal were a deliberate act by the BJP to divert attention from the alleged electoral irregularities. “In a true democracy, victory should come from the people, not the system. The kind of democracy the BJP is establishing ensures that the system prevails over the voters,” he stated.

He said that impartial investigations would reveal that many voters were unable to cast their ballots and that someone else had fraudulently voted in their place.

He charged that on election day, the police and administration removed nearly all of the Samajwadi Party’s booth agents and many supporters eager to vote. “If voters were shut out, who actually cast the votes? If our party’s votes didn’t reach those booths and our candidate received no support, then who voted there? This is a serious concern,” he said.

Yadav also pointed out discrepancies with polling slips, alleging the presence of both red-marked and regular slips, which he claimed led to discriminatory practices on voting day. Haji Rizwan, the Samajwadi Party candidate for Kundarki, echoed the same claims, stating that his supporters faced barriers to voting. BJP’s Ramveer Singh won the Kundarki bypoll by a notable margin of over 145,000 votes.

Yadav said that a victory gained through deceit is nothing but an illusion that ultimately burdens those who orchestrated it. “This entire act has been staged by the BJP. Such a victory only morally weakens those who achieve it and dulls their conscience,” he said.

He questioned how one can uphold democracy when the government and administration themselves engage in oppression. “This dishonesty is not a new phenomenon. Election rigging has become their standard operating procedure, and the evidence has been captured on camera. Even an MLA faced humiliation,” the former chief minister alleged.

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Former CJI Chandrachud removed fear of law from political defectors, claims Shiv Sena (UBT) leader Sanjay Raut

 “If he would have given a timely verdict in disqualification petition of Shiv Sena (UBT), the scenario in Maharashtra would have been different. History will never forgive him,” he said. 

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Shiv Sena (UBT) leader Sanjay Raut on Sunday criticised former Chief Justice of India D Y Chandrachud, accusing him of undermining the rule of law for politicians who switched parties in Maharashtra.

This statement from Raut follows his party’s disappointing performance in the recent state Assembly elections, where they secured only 20 out of the 95 seats contested within the Maha Vikas Aghadi (MVA) alliance. The results for the alliance’s partners were similarly poor, with Congress winning 16 of 101 seats and the NCP (SP) claiming just 10 of the 86 seats they contested for.

Raut asserted that by failing to rule on the disqualification petitions, Chandrachud enabled defections to occur freely.

Speaking to reporters, Raut said: “Chandrachud has eradicated the fear of the law among defectors. His actions will be remembered negatively in history.”

After the split of the Shiv Sena in 2022, the faction led by Uddhav Thackeray filed petitions in the Supreme Court seeking the disqualification of MLAs who defected to join Eknath Shinde. The Supreme Court subsequently assigned the responsibility to the Assembly Speaker, who earlier this year ruled that the Shinde-led faction represented the real political party.

Raut said the result of the Maharashtra Assembly election 2024 could have been different if Chandrachud had not delayed the decisions regarding disqualification petitions.

 “If he would have given a timely verdict in disqualification petition of Shiv Sena (UBT), the scenario in Maharashtra would have been different. History will never forgive him,” he said. 

“The choice of Maharashtra’s Chief Minister will be dictated by the Gujarat lobby. Perhaps the swearing-in ceremony should take place in Gujarat instead of Maharashtra,” he said. Additionally, Raut credited the Rashtriya Swayamsevak Sangh (RSS) for their role in the success of the Mahayuti coalition, alleging that their aggressive campaigning techniques significantly influenced the election results.

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At all-party meet, Congress demands discussion on Adani, Manipur in Parliament winter session

The winter session of Parliament is scheduled to continue until December 20, with no sessions planned for November 26 in observance of Constitution Day.

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In the customary all-party meeting convened by the government ahead of the winter session of Parliament on Sunday, the Congress demanded that the BJP-led central government discuss allegations against the Adani Group and the Manipur violence.

Congress leader Pramod Tiwari said that his party demanded discussions on issues such as the Adani Group bribery allegations, the Manipur crisis, pollution, and train accidents in the parliamentary session, which is starting on Monday.

Union Minister of Parliamentary Affairs Kiren Rijiju announced during a press conference that an all-party meeting was held to discuss the upcoming winter session of Parliament. A total of 42 political representatives were present, consisting of 30 party leaders and party floor leaders, each contributing their suggestions, he added.

Rijiju stated that these suggestions would be reviewed with the business advisory committee and the Speakers of both Houses to determine which issues would be addressed in the Lok Sabha and Rajya Sabha. He emphasised the desire for constructive and peaceful discussions in both Houses.

Speaking to the media after the meeting, Congress leader Gaurav Gogoi highlighted several key issues raised by the Congress and the INDIA alliance during the meeting. He pointed out that a significant concern was the financial sector scam recently highlighted by the US government, urging the BJP-led NDA government to provide clear answers regarding the matter.

Regarding the issues discussed, AAP leader Sanjay Singh noted that corruption related to the Adani group was damaging India’s global reputation and warranted further discussions.

He also mentioned the ongoing violence in Manipur, which has persisted for a year and a half without government intervention. Additionally, Singh said he raised concerns about irregularities during the Uttar Pradesh bypolls, where voters faced intimidation, questioning the integrity of the electoral process.

Singh expressed skepticism about the government’s claim to implement the Waqf Bill without awaiting the Joint Parliamentary Committee’s report.

SAD leader Harsimrat Kaur Badal said she brought to attention several issues concerning farmers, stating that they are being exploited by a central government, receiving less than the minimum support price (MSP) for their crops.

She noted that a significant percentage of DAP fertiliser supplied by the Centre is reportedly fake, and highlighted concerns regarding land transfers to Haryana in Chandigarh, which violate the Punjab Reorganization Act.

In the meeting, Badal also criticised the forced acquisition of farmland for the Bharatmala Expressway and suggested that there may be a collaborative effort between the Centre and the Opposition to stall House proceedings, emphasising that the responsibility to manage the House lies with the government.

The Congress party, which is the largest Opposition party in the House, is expected to prioritise discussions on the situation in the Northeast, the ongoing border tensions at the Line of Actual Control, and allegations surrounding businessman Gautam Adani.

The government has prepared 16 bills for consideration, including the Waqf Amendment Bill, which is under review by the Joint Parliamentary Committee.

Moreover, there may be discussions regarding the contentious ‘One Nation, One Election’ proposal, which Prime Minister Narendra Modi has supported as a means to optimise resources and enhance democracy, although it has faced opposition from Congress.

The winter session of Parliament is scheduled to continue until December 20, with no sessions planned for November 26 in observance of Constitution Day.

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