Lucknow:
Chief Minister Akhilesh Yadav today said that his government will not allow Foreign Direct Investment in multi-brand retail in Uttar Pradesh.
"The Samajwadi Party is very clear on FDI. It will not be implemented in Uttar Pradesh. But what about the stores that were given a go-ahead by the Bahujan Samaj Party government? " Mr Yadav told the media today on the occasion of his government completing six months.
However, Mayawati, the head of the BSP government, also condemned the introduction of FDI in retail, saying the common man would be adversely affected. "We will decide on October 10 whether we will support the UPA from outside or not," she said.
Mr Yadav, who replaced the BSP chief as the Uttar Pradesh Chief Minister after a landslide win earlier this year, too said that the national executive of the Samajwadi party will take decide on support to the UPA government. The Samajwadi Party gives outside support to the Congress-led coalition government at the Centre.
The UPA government yesterday announced that FDI would be allowed in multi-brand retail, adding it would be the state governments' prerogative to implement it.
Governments in West Bengal, Gujarat, Tamil Nadu, Kerala, Bihar and Chhattisgarh have already said that they will not allow FDI in retail. Trinamool Congress, a key ally in the Congress-led UPA government has demanded a rollback. The Mamata Banerjee-led government will decide on Tuesday whether to exit the ruling coalition - a threat issued by her party on Friday.
"We cannot support price hike of diesel and reduction in subsidized LPG cylinders. On Friday, a decision has been taken allowing FDI in retail sector. It is a big jolt," Ms Banerjee said on her Facebook page, adding that she was prepared to take "hard steps" if the new policies are not reversed.
Late last year, the cabinet had allowed 51% Foreign Direct Investment or FDI in multi-brand retail, but suspended its plans after Ms Banerjee threatened to opt out of the coalition at the Centre.
The policy was introduced yesterday, though it gives the state governments the right to implement or reject it.
"It is an enabling legislation," Commerce Minister Anand Sharma said, adding that, "while we respect Mamata Banerjee's prerogative to implement or not implement...equally it is the prerogative of other states to have it."
The new reforms, designed to revive a sluggish economy, means global firms such as Wal-Mart can set up shop with a local partner and sell directly to consumers for the first time. Like the Left and the BJP, Ms Banerjee has argued that the entry of international super-markets will put thousands of corner shops and farmers out of business.
The government has been trying for months to build consensus around reforms in retail. Those plans appeared to come undone in June when Mulayam Singh Yadav, the head of the Samajwadi Party, wrote to the Prime Minister urging him not to proceed with reforming the retail sector because it would result in job losses.