Prime minister Manmohan Singh today rejected calls to roll back major retail market reforms, saying the entry of the foreign players would help modernise the $450-billion sector and fight stubbornly high inflation.
The reforms have been greeted with shrill protests from opposition parties as also from allies of the Congress party in the UPA government. Amid the stand off, parliament has been adjourned for 6 days, putting on hold the passage of a number of major bills, such as one on food subsidies for the poor.
"The increase in foreign direct investment will lead to the introduction of modern technology, remunerative prices for farmers and the common man will get essential commodities at lower prices," Singh told a meeting of the Congress party which was also attended by Congress president Sonia Gandhi.
With his first public statement over the controversy, it appeared, the prime minister appeared to be firm on one of the boldest economic reforms sought to be introduced by his government in recent years.
"The decision on allowing FDI in retail was not taken in any hurry, but well considered," Singh said. He added that the investment rules would protect the interests of small traders.
He said the policies of the government would soon lead to a sharp drop in inflation, which had topped 9 per cent since last year.