New Delhi:
It is Wednesday and the government hopes its decision to press the pause button on allowing foreign direct investment in retail will mean that Parliament functions from today and for the rest of what's left of the Winter Session.
Before the two Houses reconvene after a short holiday, Finance Minister Pranab Mukherjee will meet leaders of all parties to explain the government's compromise formula - to hold the FDI decision in abeyance till a consensus is involved. He will then make a statement on the issue in both Houses. The Opposition will listen him out, but have already made clear that what they want is a "rollback" of the decision not a "holdback."
"FDI must go," the BJP's Arun Jaitley has said, but he and his party want to know what the government has to say at today's make-or-break meeting. "You see we are interested in the policy going away. This is not the right time and we've elaborated several reasons for it. I think the formulation of what the government says is extremely important. Ideally we would like the complete policy to be scrapped," he told NDTV.
For the government, it is now critical that Parliament begin functioning. Half the Winter Session has gone without any work transacted. In the next two weeks, it must clear a huge backlog that includes several important Bills. All of last week was lost to the Opposition forcing adjournments insisting that the government agree to discuss FDI in retail in Parliament and put it to vote. Or simply roll back its decision. "We hope that Parliament will run smoothly after the all-party meeting", Parliamentary Affairs Minister Pawan Kumar Bansal told PTI early on Wednesday.
It was with that sentiment and after ally Mamata Banerjee expressed her inability to support the government on FDI in retail that it changed its mind; for days it insisted that there would be no backtracking on its reforms in retail. The government argued that it was an Executive decision that did not need Parliament's nod. This week's climbdown is being seen as a big dent to the authority of the Prime Minister, who went public with his insistence that FDI in retail was here, and here to stay.
The Opposition is playing on the fissures within the government's constituents and even the disquiet among some members of the Congress on the issue. "Not only the Left or the NDA, even the objecting and protesting constituents of the UPA wanted that (scrapping of the FDI decision)...I think the government failed even in an effort to develop a consensus within the government. Forget gauging the opinion outside the government, even within they couldn't gauge it," Mr Jaitley said.
Late last week, Ms Banerjee made it clear that she cannot support the government's decision to allow 51 per cent foreign ownership of multi-brand retail stores because she believes it will jeopardize the livelihoods of farmers and traders by allowing the entry of international super-chains like Wal-Mart and Tesco. Subtly, the Congress indicated that it may not feel very differently - an opinion that was no doubt influenced by the fact that key states like Uttar Pradesh vote soon.
Sources say no decision on FDI in retail is likely now till after the UP elections due in a few months from now. Congressmen from UP have been vocal in their advise to the party leadership that the timing of the policy decision could hurt their electoral prospects in the big state. The government would also like to see what new political equations emerge from those elections. If the poll outcome throws up new alliances in the state, with, say, the Samajwadi Party or even the Bahujan Samaj Party, it would mean new allies at the Centre, where the Congress' numbers are tenuous and heavily dependent on allies like Mamata Banerjee's Trinamool Congress, which has repeatedly used this to arm-twist the UPA government.
Watching from the sidelines, along with the rest of the country, corporate India has urged the opposition not to aim for petty political gains by fighting the government's attempt to emerge from the "policy paralysis" it has been criticized for. Law Minister Salman Khurshid tried to find a brave spin - it's not a setback, he said. If the government is forced to slide from a "holdback" to a "rollback," the Prime Minister will be severely embarrassed.
Foreign Direct Investment in the fast-growing retail sector will "significantly" boost hiring activities and has the potential to create about 80 lakh jobs in the country, predict experts. Ma Foi Randstad's MD and CEO E Balaji said, "Once FDI in retail is implemented, a lot of MNCs will come and bring along their own practices and policies." He cited the example of US-based Walmart, which alone employees close to 1.8 million people.