Kuala Lumpur, December 12
In a major announcement Prime Minister Manmohan Singh said today that the issue of opening up of the retail sector to Foreign direct investment (FDI) — currently being fiercely opposed by the Left Parties — is being debated and “a positive outcome” was expected in the next five to six months.

The Prime Minister in his valiant attempt to hardsell India at a gathering of ASEAN and East Asian buinessmen here also announced that India was going to spend $ 150 billion in the next few years on the infrastructure sector and invited ASEAN companies to invest heavily in ports, airports, railway sectors the way they had in the road sector.

The Prime Minister’s remark on FDI in the retail sector made during a question-answer session after his address at the Special Leaders Dialogue, conveys his optimism that the Left would eventually be persuaded to drop its opposition to the government move.

The Left has been bitterly opposing the opening of the Indian retail sector to FDI on the ground that it will deal a death blow to small entrepreneurs as they will not be able to face the challenges posed by multinationals. If the Left finally relents, it will not only mean a tectonic policy shift in the Left’s approach and a new political template, it will also bring astronomical sums of FDI, running into hundreds of billions of dollars, into India.

This is the first time when the Prime Minister has indicated a timeframe for resolution of the FDI in retail sector tangle.

The Prime Minister faced some very tough questions from ASEAN and East Asian business leaders, ranging from India’s archaic infrastructure to exorbitant land prices to visa problems and to tiffs between politicians and businessmen like Deve Gowda versus Narayan Murthy. He said India was on the threshold of a major transition in terms of infrastructure upgrading.

He said the road system in India was bound to change “beyond recognition” in four or five years. Plans were afoot to upgrade Delhi and Mumbai airports while Kolkata and Chennai airports’ would also go the same way. New airports were being built in Hyderabad and Bangalore with public-private participation. Two million subscribers were being added every month in telephony. He agreed with the description of a Malaysian questioner that Bangalore was India’s intellectual capital and said: “But we can’t be satisfied with this. We want to develop Hyderabad, Chennai and Delhi also in a similar manner.”

Dr Manmohan Singh also batted for the Left parties and sang paens of the West Bengal Government for making efforts to attract more and more FDI for development of the state. He said West Bengal Chief Minister Buddhadeb Bhattacharjee had recently toured the South East Asian region for wooing more FDI.

The Prime Minister also pointed out that in the past 15 years the government had changed in India three or four times but no government had ever sought to reverse the process of economic reforms which he had initiated as Finance Minister in 1991.