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FDI in Retail: Can the Govt save Parliament's winter session?

Although PM Manmohan Singh made a stout defence of FDI in retail at a Youth Congress rally, the government seemed to be veering towards conceding the demand for a discussion or even an adjournment motion on the issue. To keep the UPA flock together in the event of an adjournment motion, efforts were initiated to woo the three recalcitrant allies - Trinamool Congress, DMK and the Indian Union Muslim League.

Poornima Joshi | November 30, 2011 | Updated 14:49 IST

The Opposition on Tuesday threatened to derail the entire winter session unless the government either withdraws the decision allowing 51 per cent FDI in retail or allows an adjournment motion to debate the issue.

As Parliament remained paralysed for the sixth straight day, the BJP gave the government two choices: Withdraw the decision on foreign direct investment (FDI) in retail or allow an adjournment motion on the issue to save the session from being derailed.

Although Prime Minister Manmohan Singh made a stout defence of FDI in retail at a Youth Congress rally on Tuesday, the government seemed to be veering towards conceding the demand for a discussion or even an adjournment motion on the issue.

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To keep the UPA flock together in the event of an adjournment motion, efforts were initiated to woo the three recalcitrant allies - the Trinamool Congress (TMC), Dravida Munnetra Kazhagam (DMK) and the Indian Union Muslim League (IUML). The three allies opposed the decision to introduce FDI in retail at the all-party meeting on Tuesday morning.

Finance minister Pranab Mukherjee, who chaired the all-party meeting, reportedly spoke to DMK chief M. Karunanidhi and TMC leader Mamata Banerjee, to soften them up before any discussion takes place in the House.

Mukherjee has called a meeting of Congress MPs on Wednesday to explain the government's position on the issue.

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The Prime Minister had a word with Mamata Banerjee's colleague and minister of state for health Sudeep Bandopadhyay on the issue. The IUML was also contacted by the Congress troubleshooters.

BJP workers protest in the Capital against FDI in retail.
While these backroom negotiations were on to keep the UPA's constituents together, the Opposition - BJP, CPM, CPI, BJD, TDP, JD(U), AIADMK and even the UPA's "outside supporters" BSP and SP - stood united in their demand for a rollback with most parties moving motions for adjournment of the House on the matter.

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That the Congress was under pressure to allow a debate in the House on the issue became clearer after an intervention in the meeting by the usually taciturn Sharad Pawar.

The NCP leader reportedly told Mukherjee, who chaired the meeting of floor leaders of all political parties, that he was as supportive of the House resuming its routine functioning as he was of the decision to introduce FDI in retail. Pawar said if a debate to take a sense of the House on FDI in retail restores order and Parliament resumes its normal function, there was no harm in allowing it.

"The House should run. Let there be a discussion and a sense of the House decide the fate of the decision," he said.

The BJP, represented by L.K. Advani, Sushma Swaraj and Arun Jaitley, told the finance minister that there are only two ways in which the House can function.

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One, the government withdraws the decision and two, it allows an adjournment motion calling for a rollback of decision on FDI in retail.

As the PM's strong defence of the Cabinet decision at the public function indicated, the government was in no mood for a rollback. At the same time, there was no such hurdle in allowing an adjournment motion provided there could be some negotiation on the language of the motion, at least the one moved by the principal opposition party, the BJP.

The BJP's motion, moved by Murli Manohar Joshi and others, calls for "nullifying the decision on FDI in multi-brand retail" that amounts to censure of the government. The government would like the language to be modified. For the moment, however, both sides were not ready to give an inch.

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"We're not on the negotiating table…" said leader of the Opposition Sushma Swaraj.

"The language of the motion is non-negotiable. And why don't they allow the motion?" asked Swaraj. "If they have the majority in the House with them, let them go ahead with a policy decision of such far-reaching consequences. But let the House at least debate the issue and evolve a sense on it."

Swaraj refused to respond to the PM's comment on FDI in retail outside Parliament. "The finance minister spoke to all of us in the morning. He told us he will consult the PM and apprise him of all the suggestions that came up in the allparty meeting. Unless we are officially given a response by the government, it is not proper for me to comment on what the PM has said in a public function," she said.

She was referring to the PM's insistence at the Youth Congress rally that the decision to allow FDI in retail was "aimed at creating jobs, improving the price given to farmers and enabling import of technology besides benefiting consumers". The PM also stressed that states have the means to reject and prevent foreign participation in retail if they are not convinced of its usefulness. "We are not forcing anyone to follow this policy," he said.

He then went on to extol the virtues of the decision. "I would like to make a mention today of the decision of the government permitting FDI in retail. We have not taken this decision in any haste but after a lot of consideration.

It is our firm conviction that the decision will benefit our country," said the PM, adding that the decision will reduce the differential that exists between wholesale and retail prices and consumers will get commodities at reduced prices.

On the fears that the small businesses in the country would be hurt by the FDI decision, the PM said: "We have put some conditions so that FDI in retail promotes our small industry". The Opposition had a ready response to all these claims.

According to leader of the Opposition in the Rajya Sabha, Arun Jaitley, opening up FDI may lead to unfair competition and ultimately result in largescale exit of domestic retailers, especially the small familyowned business.

"They will not have the wherewithal to compete with supermarkets with their deep pockets. Given the large unorganised component of the retail sector, this is a major concern," said Jaitley.

Both the sides clearly have their arguments ready and the stage is set for a debate. However, the Congress is not likely to cave in to the BJP readily on a policy decision when there are already allegations of a policy paralysis in the government.

But neither does the government seem ready for a repeat of 2010, when the entire winter session was washed out over a demand for a JPC on Spectrum 2G allotment scam which was finally allowed by the government. They will let the Opposition wait it out for a while but eventually, it seems that a debate on FDI in retail will take place.

Courtesy: Mail Today

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