Assorted conditions on policy often defeat intended objective
The latest example of this trend is the policy package relaxing foreign direct investment (FDI) in single-brand retail from 51% to 100%.See full article Rather than promote inclusion through reforms, which would pave the way for rapid expansion of labour-intensive manufactures and, hence, well-paid jobs for the low-skilled, and through redistribution, which would directly transfer income from the rich to the poor, we seem to have set on a course to converting every policy into the instrument of advancing social goals. The consequent muddying of policy waters has been distorting incentives, undermining the primary objective of the policy while opening ever more avenues to corruption. The latest example of this trend is the policy package relaxing foreign direct investment (FDI) in single-brand retail from 51% to 100%. Rather than do away FDI cap in a clean way, the policy requires retailers going beyond 51% FDI to source 30% of the value of products they sell from Indian small and village industries. Thus, a policy that was meant to remove a distortion and facilitate commercial transactions to take place freely has been…
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