Monday, November 28, 2011

FDI in retail: All-party meeting ends without breakthrough

New Delhi:November 29, 2011 (NDTV Correspondent)

A meeting of all parties called by Finance Minister Pranab Mukherjee has ended without a breakthrough - the hope was to find an exit from the impasse over the government\'s move to allow Foreign Direct Investment or FDI in retail. After the meet ended, the Opposition reiterated it will not allow Parliament to function till the government withdraws its decision. The UPA\'s own allies like Mamata Banerjee and M Karunanidhi also want the decision withdrawn.

Mr Mukherjee will now convey the opinion of different parties to the Prime Minister. \"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.

There has been no business conducted in Parliament this session - opposition parties say that cannot happen till they are allowed an adjournment motion on the matter that would introduce a debate on FDI followed by a vote. The government is fine with a debate but has used technicalities to argue against a vote. The numbers - if it comes to that - could expose the UPA is in a minority on the decision to allow 51% FDI in multi-brand retail which would allow companies like Walmart and Tesco to India. 246 votes would be in favour of the government; parties like the Left and the BJP, added up together, would equal 290 votes against FDI.

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 to allow \"Organized retail trade on the international pattern for growth of trade and employment.\" That year the party led the outgoing NDA government and expected to be back in rule. 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.

Far more worrying for the government is the opposition that has been clearly expressed by key allies like Mamata Banerjee and the DMK, whose presence in the UPA is key to the survival of the government.

So yesterday, the government lunged into damage-control mode. While it has made up its mind not to reconsider its stand on FDI, Commerce Minister Anand Sharma sent a lengthy note to the leaders of all major political parties and the chief ministers of states that are opposed to FDI in retail like Bihar\'s Nitish Kumar. In his letter, Mr Sharma explained that 30% of the requirements for retailers will have to be sourced from Indian small and micro enterprises. (Read the full letter) The central government has also made it clear that it\'s up to states to decide whether to adopt the FDI policy. For its part, the central government wants to allow FDI in retail in about 50 cities that have a population of at least 10 lakhs.

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