Will look at FDI in retail, diesel regulation says FM

The Finance Ministry at last acknowledges the need to turn around the sentiment for higher capital flows and the need to focus on managing the rupee. A CNBC-TV18 exclusive story reported the finance ministry is also seriously looking at proposals of FDI in retail and diesel deregulation. They hope these two reforms will suffice to bring some cheer into a lackluster market.

The ministry will look into the proposals after the Budget session is over, but asserted that macro fundamentals still remain strong in the economy.

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They hope that the above mentioned moves can turn around investor sentiments and that the GAAR postponement impact will show up in sentiment.

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The sharp fall in the markets in the last month or so has got the Finance Ministry worried. Sentiments had turned sour after the FM said he was planning to go ahead with the GAAR. However, the recent announcement that GAAR will be implemented by 2013 did little to cheer the markets.

The overall macro environment situation does not seem very encouraging. The fall in the IIP nos and the higher than expected inflation numbers only add to the dismal scenario of the country.

Last week, the combined market capitalisation (m-cap) of top-10 Sensex companies declined sharply by Rs 58,797 crore last week, with Coal India Ltd (CIL) taking the biggest hit.