Tuesday, December 18, 2012

Reserve Bank of India not keen on overseeing end-use of foreign funds in retail sector

RBR Staff Writer
Published 18 December 2012

The proposed reforms of the Indian retail sector continue to face hurdles as the country?s Reserve Bank has distanced itself from being a watchdog over the end use of funds brought into the country to set up foreign-owned retail stores.

Indian department of industrial promotion and policy, the implementing agency for FDI in India, has also been told by the Finance Ministry that the latter can't be an overseer for utilization of funds.

While the country has proposed to allow foreign direct investment into the retail sector, currently, the issued guidelines provide no overseeing authority to monitor implementation of end-use norms in the sector, reported the Economic Times.

Commenting on the existing scenario PwC executive director Akash Gupt told the newspaper, "The issue of monitoring mechanism is relevant for many sectors, and not just retail, where FDI policy or the FIPB approvals prescribe operational conditions such as construction, financial services, telecom, test marketing and brownfield pharma."

The lack of clarity, claim experts, on norms concerning government monitoring could leave the investors undecided.

Source: http://www.retail-business-review.com/news/reserve-bank-of-india-not-keen-on-overseeing-end-use-of-foreign-funds-in-retail-sector-181212

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