FDI in retail: Allies angry, opposition wants vote, PM calls all-party meet

Mangalore Today /NDTV

New Delhi, Nov 28:  The government is searching desperately for an eject button from the current crisis over its decision to allow 51% Foreign Direct Investment or FDI in the multi-brand retail sector. Parliament was adjourned this morning over the matter. The Prime Minister met with Sonia Gandhi. Meanwhile, Finance Minister Pranab Mukherjee has called an all-party meeting tomorrow morning in the hope of finding a solution. And Commerce Minister Anand Sharma has released a letter, reportedly at Mrs Gandhi’s insistence, to the leaders of major political parties explaining why FDI could be just what the economy needs.

In his letter, Mr Sharma stresses that the government’s policy on FDI will have a distinctly Indian imprint. "In the absence of adequate cold chain infrastructure, logistics and transportation, our post-harvest losses remain unacceptably high...a complex chain of middlemen have a cascading impact on supply inefficiencies and prices as well. As a result, on the one hand farmers are unable to secure remunerative price for their produce, while consumer ends up paying more than 5 times the price secured by the farmers," Mr Sharma said in his note that was circulated to leaders like Sushma Swaraj of the BJP. "We have also stipulated mandatory 30% sourcing from small industry, which will encourage local value addition and manufacturing," Mr Sharma added. And in what could be an attempt to cajole allies like Mamata Banerjee, the government stressed in a different clarification, "India has a federal structure of government. The FDI policy is an enabling framework and it remains the prerogative of the states to adopt it."

The government’s attempts at make-nice come after virtually every major political party expressed its anger over the FDI decision, which will allow giants like Walmart and Tesco to set up shop in India. The Left and the BJP have insisted that the policy be discussed in Parliament under an adjournment motion which would end with a vote. The government has rejected this - it wants a debate, but no vote.

Most worrying for the government are the sharp reprimands that have been served by its biggest allies - M Karunanidhi and Mamata Banerjee, who have both asked the government to reverse its decision on the grounds that it will hurt farmers and traders. The Trinamool Congress (TMC) which is headed by Ms Banerjee today sought a rollback of the Centre’s decision, arguing that there would be no embarrassment if the withdrawal was in the interests of workers and farmers. It also expressed its strong displeasure about not being consulted over the move. "There is no system in UPA 2 to discuss moves before they are made", party leader Sudip Bandopadhyay said, repeating an accusation that the TMC voiced just a few weeks ago, when the government raised petrol prices.
 
Mr Karunanidhi, also a senior member of the UPA with 16 Lok Sabha MPs, also put the government on notice. "It’s dangerous to allow FDI in retail trade as it affects lot of small traders as well as middle-class consumers. It will also be a cause for economic decline of our country. The DMK has sounded a note of warning in this regard in the parliament," said Mr Karunanidhi.

 

The government faces more opposition from within in Kerala where the Congress party’s branch has expressed its dissent. And two senior Union ministers from the Congress - Vayalar Ravi and TK Thomas - acknowledged that they had shared reservations about allowing FDI in the multi-brand sector in the cabinet meeting which eventually cleared the proposal.

Sharad Yadav of the Janata Dal (United) (JDU) says he will ensure Parliament does not function till the government withdraws its decision to allow 51% FDI in the multi-brand retail sector, a move that would allow giants like Walmart and Tesco to set up shop in India.
 
An adjournment motion allows a member of the House to ask that regular business be suspended to discuss an urgent matter of public interest.  It includes a debate and ends with a vote that tests the government’s strength. The opposition’s insistence on a vote is seen as a pressure tactic - what it really wants is for the government to put its decisions on retail on hold till the matter is extensively debated in Parliament. 

In the Rajya Sabha, Jayalalithaa’s party, the AIADMK, moved a notice for an adjournment motion. Senior BJP leader Murli Manohar Joshi had planned a similar course of action for the Lok Sabha.

And Gujarat Chief Minister Narendra Modi confirmed his presence on a long list of chief ministers who are fighting the government over FDI in the multi-brand sector on the grounds that it will wipe out lakhs of small mom-and-pop stores. "My stand is the same as that of my party BJP & which is in the interest of the nation," Mr Modi tweeted this morning.
 
The government has real cause for concern given the fact that the BJP has found backers over the FDI issue in AIADMK chief J Jayalalithaa, Trinamool Congress chief Mamata Banerjee and BSP chief Mayawati - the three women chief ministers of Tamil Nadu, West Bengal and Uttar Pradesh.

Mamata Banerjee is a UPA ally and has partymen as important ministers at the Centre. But she does not support FDI in the retail sector. "Some people can support 51 per cent FDI in retail but I do not support it. You see, America is America, Bangladesh is Bangladesh, Pakistan is Pakistan and India is India. I have to take into account how much capacity I have, how much is my ability. There are so many shops here. If these shops close what would the shop owners eat?" Ms Banerjee said yesterday.

The government has to find an emergency exit so that important legislation that is pending can be considered by Parliament. Headlining this list is the Lokpal Bill which sanctions a new independent agency to investigate complaints of corruption against government servants. Anti-graft crusader Anna Hazare had warned that he would begin a new mass protest in Delhi if the Lokpal Bill was not passed in this winter session of parliament. He will hold a day-long rally at the Jantar Mantar in the national capital on December 11, his close aide Arvind Kejriwal told NDTV today.