India's UPA coalition government, widely accused of policy paralysis after having seen annual economic growth dip under its watch to 5.5 percent from more than 8 percent, initiated a slew of reform measures last weekend designed to attract foreign capital and restore investor confidence. The most significant of these reforms was the opening up of the retail sector to foreign investment, a decision first made by the government last November but subsequently rescinded after vociferous resistance both from the opposition and some of the coalition's own partners.
The reform package, which also included a liberalization of investment opportunities in aviation and power, the sale of equity in public-sector companies to raise capital and a steep increase in the price of diesel fuel, was the most far-reaching since the liberalization of India's socialist economy in 1991, when the country faced a balance-of-payments crisis.
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