This Article is From Nov 29, 2011

FDI in retail: PM defends decision, says good for economy

New Delhi: While it negotiates its way through political opposition, the government has aggressively taken its reforms message to the people, pegged on its decision to allow global players in retail, which has the opposition, and some allies, up in arms. Prime Minister Manmohan Singh used a public stage on Tuesday to say that his government believed Foreign Direct Investment in retail would benefit farmers, small retailers, the country as a whole.   

"We want to bring laws, but the Opposition is not letting Parliament run. This betrays public trust. We hope to resolve the crisis though on FDI. We have really considered it and believe it is for our best. It will get us modern technology, not let crops get damaged, get farmers good prices and bridge gaps." The PM also explained, speaking at a Youth Congress meet on Tuesday, that there was no compulsion on states to implement the decision on FDI in retail. "The states which do not see benefits of FDI in retail, there are ways not to implement it," he said. (Read: Highlights of PM and Sonia Gandhi at Youth Congress meet)

In Parliament, Dr Singh's government has so far said no to an adjournment motion on the FDI-in-retail issue. But, sources say, with a chunk of the short Winter Session of Parliament lost to chaos and a lot of business to finish, it may now just agree to a discussion followed by a vote, to break the logjam.

That climb-down might be needed. The BJP said again on Tuesday afternoon that the government had a choice - "Roll back the decision to allow foreign direct investment in retail and discuss the issue first. Or, discuss the matter in Parliament under an adjournment motion which would entail a vote. Only then will the House run," said the BJP's Sushma Swaraj.   

An all-party meeting this morning, called by the government to break the impasse over FDI, remained inconclusive. Finance Minister Pranab Mukherjee briefed the PM on the meeting, where a united Opposition made clear that it would not budge.

Sources said the government was now coming around to the view that it could cobble together the numbers and was working on the finer details of the wording of an adjournment motion.

Only, it may run into more trouble there. Ms Swaraj said the "content of the adjournment motion is non-negotiable." The Opposition's adjournment motion on FDI says the decision should be withdrawn.

In its hard stance, the Opposition is counting on big UPA allies like the Trinamool Congress and the DMK opposing the government on FDI. The BJP's Arun Jaitley remarked that the DMK and Trinamool opposed FDI and wanted a rollback at this morning's meeting. Sharad Pawar of the NCP, he said, supported FDI but wanted the stalemate to end and Parliament to run.

The BJP's suggestion: Let there be debate. Take sense of the House. Let the fate of FDI in retail be decided by that. The Congress has held out so far, saying it is an Executive decision that does not enquire a Legislative nod.

But there are worries, also within. As the UPA government that the Congress leads tries to get allies and opponents alike to understand the benefits of allowing global players in multi-brand retail, Sanjay Singh, a Congress MP from poll-bound UP has said he plans to write to the PM to say that the timing of the FDI decision will hurt the party's electoral prospects  in UP. (Watch: What Sanjay Singh said)

Mr Singh contends that "multinationals will come with billions and hurt poor unorganised people in backward states like UP...I will write to the PM that the move will be detrimental to the Congress' interest," he said.

The UPA government can ill-afford dissension within. On Wednesday morning, Congress president Sonia Gandhi will meet all party MPs. On Tuesday again, the work day for parliament ended by noon - both houses were adjourned till tomorrow.  

But both Mamata Banerjee and M Karunanidhi - whose presence in the UPA is essential for the government's survival - say they will not exit the coalition. "We told Pranab-da that we want a rollback and he said he'll consult the PM," said Sudip Bandyopadhyay of the Trinamool Congress, which is headed by Ms Banerjee and is the second-largest party in the coalition at the Centre after the Congress. "We want the House to function," Mr Bandyopadhyay added, stressing, "We do not want to de-stabilize the government." (Read: Karunanidhi's full statement asking FDI rollback)

The BJP says it's opposed not just to the FDI decision because it would hurt farmers and traders, but at the Government's attempt to exclude large parties from consultations. But its righteousness is somewhat undermined by the fact that in 2004, its election manifesto proposed 26% FDI in retail. By the 2009 general elections, after five years of sitting in opposition, the party had done a U-turn, deciding to oppose FDI in retail. When asked to explain, former BJP Finance Minister Jaswant Singh said that his party pushed for FDI when the economy was booming; today, he said, it is not.
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