Indian media hails 'rush of reforms'

Indian newspapers hailed Saturday a "rush of reforms" unveiled by the government which has thrown open the retail and aviation sectors as well as tackled fuel subsidies in highly contentious moves.

The beleaguered administration of Prime Minster Manmohan Singh, widely criticised for its ponderous and timid decision-making, has opened the "reform floodgates" according to a headline in the Mail Today tabloid.

"From Paralysis to Rush of Reforms", read the front-page of The Times of India, the most widely circulated English-language daily, while editorials in The Hindu newspaper said the government was "going for broke".

On Friday, Singh's cabinet announced a decision to allow foreign supermarket chains such as Walmart or Tesco to own up to 51 percent in Indian subsidiaries in a proposed change that was withdrawn last year due to fierce resistance.

Shopkeepers, opposition parties and even an ally in the national coalition opposed the move on the grounds that it would destroy the livelihoods of the small business owners who dominate the retail sector.

The government sees foreign supermarkets as a way to improve the food supply chain, particularly with refrigerated facilities, as well as a means to create an estimated 10 million jobs and bring down food prices.

The government also announced it would allow foreign airlines to buy stakes in domestic carriers for the first time, capping their ownership at a maximum 49 per cent.

On Thursday, the government announced a 12-percent hike in the price of heavily subsidised diesel fuel in a bid to reduce the yawing public spending deficit that threatens India's financial health.

It also cut in half the number of subsidised gas bottles used for cooking that each family is entitled to each year.

The Business Standard gushed: "As if on a steroid, the government cleared all that had been seemingly 'undoable' till now, in spite of the frowning allies and the opposition."

But the Indian Express newspaper said in an editorial that Singh would now be tested by the sort of resistance which has led him to roll back difficult decisions in the past.

The coalition "has run up a record of sorts making promises it could not keep, which is why the critical period for the government starts now", it wrote.

Populist minority coalition partner Trinamool Congress, a regional party from West Bengal state, issued a 72-hour deadline for the government to withdraw the reforms, setting up a tense political drama for next week.

Trucking unions are also threatening to go on strike over diesel prices, however, and there are fears that higher fuel costs will spur India's inflation, which accelerated to 7.55 percent in August.

Singh, 79, the architect of a wave of liberalisation in the 1990s, said the reforms were designed "to bolster economic growth and make India a more attractive destination for foreign investment".

The government also approved the part-privatisation of four state-owned companies on Friday and said it had loosened foreign investment rules in the broadcasting sector.

India's once-robust economy grew by just 5.5 percent between April to June -- its slowest expansion in three years.

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