FDI battle: Advani rejects Pranab's offer, impasse continues

FDI battle: Advani rejects Pranab's offer, impasse continues
New Delhi:  The BJP  has refused to accept the truce offered by the government over the crisis caused by the decision to allow 51% foreign ownership of multi-brand retail stores.

After a series of meetings all day between the senior-most members of the Congress,  Finance Minister Pranab Mukhejree called LK Advani with an offer.  He said a one-line adjournment motion would be moved by the government  - this would initiate a debate and would result in a vote. 

Mr Advani, however, said it's the BJP's text for an adjournment motion that should be debated and voted upon. The BJP's strongly-worded motion asks for a "rollback" and Mr Advani said this draft is "non-negotiable." That's not acceptable to the Congress. In fact, Mr Mukherjee told Mr Advani that the Prime Minister is not in favour or reversing his decision.

The new policy is being fought aggressively by the BJP. Parliament remains in a state of paralysis - again, both houses were adjourned by noon

The Congress today backed the Prime Minister and said there is no question of changing its stand to allow Foreign Direct Investment or FDI in the retail sector."The PM has made it clear that it is a well thought-out decision and the party supports it," said Congress spokesperson Manish Tewari. Commerce Minister Anand Sharma told NDTV, "There is no question of a rollback."

The confidence can be attributed to the fact that its two indispensable political partners - the DMK and Mamata Banerjee's TMC - seem open to persuasion. Both parties have 18 Lok Sabha MPs each. Both had earlier asked that the government to withdraw its decision on allowing Foreign Direct Investment or FDI in retail.

But the PM has been reaching out to allies with phone calls, and the results are positive. Earlier today, the DMK conveyed that it will not vote against the government in Parliament.  "The Congress is now working on winning a similar commitment from Ms Banerjee, who is the chief minister of West Bengal. "I have spoken to Mamata and addressed her concerns," Anand Sharma said.

The PM, Sonia Gandhi and other senior Congress leaders met this morning and again this evening. The half-way mark in the Lok Sabha is 272.  With the TMC and the DMK, the government manages 282 votes. Without either of those parties, it drops to 264 votes - which means it loses the confidence of the House on the issue of FDI in retail. The government would then have to withdraw its reforms in FDI; the loss of moral authority would be hugely damaging.

The opposition says there should be no Foreign Direct Investment or FDI in retail because it will adversely impact lakhs of small traders and farmers. And it wants the Congress to prove that it has the numbers to back its new policy.  The Commerce Minister today countered, "The BJP cannot accuse us of not having full-fledged discussion in Parliament on the issue. This was discussed and deliberated for over 40 minutes on August 3 in Parliament."

Murli Manohar Joshi of the BJP has challenged the benefits listed by the government of its reforms in retail.   "Is there no inflation in places where Wal-Mart exists?" Mr Joshi asked, reacting to statements from ministers about how FDI will check inflation. "The government's statement that these reforms will help employ lakhs of people is absolutely baseless," he added.    

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.


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