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

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New Delhi, November 29, 2011: It was at a Congress conclave for youth leaders that the Prime Minister defended his government’s decision to allow 51 per cent foreign ownership of multi-brand retail shops. To a far calmer audience than the one that he will greet in Parliament, the Prime Minister said he is confident that Foreign Direct Investment in retail will 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." Dr Manmohan Singh also offered an olive branch to allies like Mamata Banerjee, the chief minister of West Bengal, who has said her party wants the government to reverse its 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.

Political parties, however, want more than reassurances. The BJP and the Left want an adjournment motion on FDI - that entails suspending all other business to debate with a matter of public interest that ends with a vote. The government has flatly refused a vote so far; parties like the BJP say till that changes, Parliament will not function - a promise delivered today when both houses were adjourned by noon. An all-party meeting before that called by Finance Minister Pranab Mukherjee ended without a breakthrough. 

"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.  

Despite pressure from allies like the DMK and Ms Banerjee, the government has said it will not reconsider its decision. But new criticism today came from within - Sanjay Singh, a Congress MP from Uttar Pradesh says the government’s policy shows bad timing - it will hurt the party in the elections in UP, he believes.

Mr Singh contends that "multi-nationals 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. 

In a veiled attack on Commerce Minister Anand Sharma being from the Upper House, Mr Singh said, "MPs from Lok Sabha view issues differently from those of Rajya Sabha. People come in Rajya Sabha directly and as such they do not feel the pain of people the way Lok Sabha members, being in direct touch with voters, feel."

In an attempt to seal any fault-lines, Sonia Gandhi will meet all party MPs tomorrow.

Privately, Congress sources say, the government is considering a host of options. Some within the party suggest reducing the FDI cap - not a viable alternative given the government’s decision to stand its ground. An alternative is to allow the adjournment motion - but its wording could lead to a new battle with the Opposition. The government won’t agree to text that talks of a roll-back or a vote, and this will be unacceptable to the BJP.

While this session of Parliament has been a non-starter, there is a silver lining for the government. If Parliament cannot function, the crucial Lokpal Bill which the government has been reluctant to pass will be affected - and the government can blame the opposition. At the same Congress gathering today, Sonia Gandhi said, the government is working on a variety of legislations "which will systematically fight corruption. I hope that the opposition will support us in passing these important measures," Mrs Gandhi said.

Courtesy: NDTV