PMEAC suggests 49 per cent retail FDI to break logjam

The Prime Minister's Economic Advisory Council (PMEAC) has suggested foreign equity participation of up to 49 per cent as a compromise formula to resolve the multibrand retail issue.

The Council has mooted FDI in multi-brand retail of up to 49 per cent ''for channelling transfer of capital and technology.'' The council added that states receptive to the idea could implement this.

The cabinet's decision for letting majority, 51 per cent, FDI had run into fierce political opposition. According to the council, lowering the FDI level would get more people on board. The council also dwelt on liberalising FDI norms in aviation and faster decision-making on infrastructure projects.

Releasing the committee's outlook for 2012-13, PMEAC chairman C Rangarajan said allowing 49 per cent FDI would signal the government's commitment to furthering the reform process.

''You have to put in efforts for policy action. So, we have suggested allowing 49 per cent FDI in multi-brand retail to begin with, to bring more people on board,'' Rangarajan said.

However, before taking a decision, top international retailers should be consulted, the report suggested, adding this would ensure investors favoured the decision, and states favouring the move could implement it soon.