FDI in retail: Congress rules out rollback, says it’s "well thought-out" decision

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New Delhi, Nov 30, 2011:  The Congress this evening made it clear that the government will not reverse its decision to allow 51% foreign ownership of retail stores that carry different brands. The policy is being fought aggressively by a united opposition. "The PM has made it clear that it is a well thought-out decision and the party supports it," said Congress spokesperson Manish Tewari. The party’s senior-most leaders including Sonia Gandhi and the PM met to discuss their strategy this morning; they will regroup again this evening. Law Minister Salman Khurshid said that the government is also talking to the opposition to find a way out of the impasse that has led to a non-starter winter session of Parliament.

Earlier today, the DMK which has 18 Lok Sabha MPs - conveyed that it will not vote against the government in Parliament. That has no doubt boosted the Congress’ confidence. It’s now working on its other big ally - Mamata Banerjee’s TMC - to come around.

The opposition - like some key political parties that are members of the government - says there should be no Foreign Direct Investment or FDI in retail because it will adversely impact lakhs of small traders and farmers.

The Prime Minister made his stand clear yesterday. At a youth leader conference organized by Rahul Gandhi, he said, "It will get us modern technology, not let crops get damaged, get farmers good prices and bridge gaps."

The opposition has been equally categorical that it will not allow Parliament to function unless the government agrees to a debate followed by a vote. The BJP wants to initiate the debate with a strongly-worded adjournment motion - which means that normal business is suspended to focus on a matter of public interest - and the BJP says the text of this notice is non-negotiable. It will ask for the retail reforms to be reversed. "If the Government even wants to suggest they want to change the wording of the adjournment motion moved by me... I am making it clear...there will be no change," said the party’s Murli Manohar Joshi. He also challenged the government’s claim that reforms in retail sector will help fight inflation. "Is there no inflation in places where Wal-Mart exists?" he asked. "The government’s statement that these reforms will help employ lakhs of people is absolutely baseless," he added.   

The Congress has so far said there is no question of putting its decision to vote - but the continued paralysis of Parliament could force its hand. Today, for the seventh day in a row, Parliament was adjourned by noon. So the party is trying to consolidate its numbers. The PM has called major allies like the DMK and Mamata Banerjee’s TMC. Without the support of these parties, the UPA may not be able to defeat the BJP’s adjournment motion - that would lead to a serious loss of face, and considerable pressure to scrap its reforms in the retail sector.

It’s not just the policy - but how it’s been introduced and handled - that has upset the opposition. The Cabinet cleared the reforms at a meeting last week. The Prime Minister did not attend an all-party meet called yesterday by Finance Minister Pranab Mukherjee. Instead, he was seen at a conference of youth leaders organized by Rahul Gandhi where Dr Manmohan Singh defended his reforms in retail. "The PM doesn’t come for the all-party meet...he is not coming to the House. He offers his response at a meeting called by Rahul Gandhi...this is total disregard of Parliament," said Venkaiah Naidu of the BJP.

It’s not just the opposition or allies that are upset with the government. Praveen Singh Aron who represents Bareilly has become the second MP from Uttar Pradesh - a crucial state which votes soon - who has written to the PM asking him to reconsider the new policy on FDI in retail.
Courtesy: NDTV