FDI clearance UPA’s big image saving move?

Mtoday news / PTI

New Delhi, Nov 25: The Union Cabinet gave its nod for foreign funds in retail on Thursday, a move that the beleaguered UPA hopes will help salvage its image. It’s also the government’s first big policy initiative that sends a clear message to dissenting allies like TMC chief Mamata Banerjee as to who’s calling the shots in the coalition.

 

 

Sources say both the Prime Minister Manmohan Singh and Commerce Minister Anand Sharma explained in detail the need for FDI in the sector.

The Bharatiya Janata Party (BJP), the Left, UPA ally Trinamool Congress along with some Cabinet ministers Jairam Ramesh and AK Antony have opposed it.

But they were reassured that sensitivities of Indian market would be kept in mind.

The Opposition was also against the idea of FDI in retail. The BJP feels that FDI will lead to unemployment, the Left has said that it may lead to price rise.

The BJP favours a fragmented market so that the consumers have a wide choice and feels consolidated markets make the consumer captive.

Mamta has also said that she opposed the government’s decision to allow FDI in multi-brand retail. "We don’t support this, I don’t support, even pension scheme also," she said in an interview with CNN-IBN.

But by bypassing this resistance, the PM has tried some course correction. His government has been accused of a drift in governance and on the backfoot after a series of scams and controversies.

The UPA is hoping this latest move will salvage some of its reputation.

And an enthusiastic government is planning more reforms next in line is FDI in civil aviation. With this comes the message Singh is still king and allies cannot always dictate terms.