Govt sticks to guns on retail FDI as Opposition gets shrill

Written by fe Bureau | New Delhi | Updated: Nov 30 2011, 06:19am hrs
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The UPA government on Tuesday launched a counter-offensive on the opposition which remained steadfast in disrupting Parliament over last weeks Cabinet decision to allow 51% foreign direct investment (FDI) in multi-brand retail. The decision was not taken in haste, but a considered one. It will benefit us a lot, Prime Minister Manmohan Singh said at a Youth Congress rally here. He added that the Opposition would do well to refrain from impeding crucial legislative work needed for India's economic prosperity.

Home minister P Chidambaram, Plan panel deputy chairman Montek Singh Ahluwalia and chief economic advisor Kaushik Basu joined the Prime Minister in spelling out the merits of FDI in retail and firmly defending the decision.

Comments from the PM and other leaders came on a day when the Opposition reiterated its demand for a rollback of the decision and threatened to stall Parliament till the issue was put to vote or the decision annulled. Earlier in the day, finance minister Pranab Mukherjee, who held an all-party meeting on the issue, said he would take the views of the opposition to the prime minister and the Cabinet.

Singh showed his resolve to pursue other reform measures as well, flaying the Opposition for blocking crucial pieces of legislation. We weathered the storm of the 2008 meltdown. We need new laws and amendments to older ones now. We need Parliament to work properly, but the Opposition is not allowing it to happen, he said.

Justifying the decision to open the retail sector to FDI, Singh said this would benefit farmers as this will bring in latest technology, help save farm produce from being destroyed and curb inflation. We have put some conditions so that FDI in retail encourages small and medium enterprises of the country. There is no compulsion on states to implement decision on FDI in retail; states which do not see benefits of FDI in retail, there are ways not to implement it, he said.

Even after the all-party meet at 10 am, both Houses were adjourned for the day as Opposition and UPA allies Trinamool Congress (TC) and DMK continued their protest. Chidambaram said: Foreign investment will bring expertise, knowledge, technology and will improve the distribution system. Hitting out at the Opposition, he added: Conviction in reforms should be maintained irrespective of whether you sit on treasury benches or on opposition benches.

Benefits of opening the supermarket sector to foreign investment outstrip the costs, said chief economic advisor Basu.

There is no basis for fear of job losses following the opening up of India's retail sector to foreign investments,Ahluwalia said.

Opposition parties agreed with this suggestion (that their views would be taken to the PM and Cabinet, CPI(M) leader Sitaram Yechury said after the all-party meeting. But Mohan Singh of the Samajwadi Party added a caveat: Without withdrawing the FDI decision, Parliament cannot function smoothly.

The TMC too appeared as tough on the government but insiders insist the party was in no mood to pull the rug from under the UPA. We have demanded a rollback of the decision. We have been demanding that a meeting of UPA partners should be held every three months. Such matters should be discussed with UPA partners, TC leader Sudip Bandhopadhyaya said.

Congress seniors said his suggestion for a regular meeting of UPA allies would be taken seriously.

The BJP, meanwhile, filed an adjournment motion again on Tuesday (adjournment motions are to be filed afresh everyday to be considered) in the Lok Sabha to discuss the issue and said nothing less than a rollback was acceptable. The demand of the whole opposition is that the decision should be revoked. It is clear that America, Britain, France have lobbied for allowing FDI in retail, party leader Murli Manohar Joshi said.

One ruling party MP said that it was the first time in months the government did something and the opposition was reacting, rather than the opposition provoking us and we defensively reacting.

Government sources added they were willing to debate the issue but not under an adjournment motion. Senior BJP leaders feel a case of privilege can be made against the government for going public with the policy when the parliament was in session. In all, it seemed the government has exchanged policy paralysis with a legislative paralysis.

The prime minister's strong defence notwithstanding, there were, however, continuing murmurs from within the party. Congress MP from Sultanpur Sanjay Singh has written to Singh saying the decision would mean disaster for many small business owners. Announced just ahead of Uttar Pradesh elections, many Congressmen feel it would be used to depict the party as anti-poor and pro-big business.

Sources also said a move to hold the decision in abeyance to allow parliament to function was not off the table. The opposition, however, said nothing less than a rollback would persuade them to allow the House to run.