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FDI rage: Options before an isolated UPA government

Last updated on: November 28, 2011 22:18 IST

FDI rage: Options before an isolated UPA government

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Renu Mittal in New Delhi

With Parliament paralysed for the fifth day running and no business being transacted, Prime Minister Manmohan Singh is under pressure to partially rollback the Foreign Direct Investment in retail, which was approved by the Union cabinet last week.

 

The government has called a meeting of leaders of political parties on Tuesday morning at 9.30 am where Finance Minister Pranab Mukherjee is expected to explain the finer print of the decision to political parties and appeal to them to allow Parliament to run.

But Leader of the Opposition in the Lok Sabha Sushma Swaraj has made it clear that Parliament will not be allowed to run till the government reverses its decision.

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Option 1: Rollback the FDI in retail from 51 to 26 per cent

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Another senior BJP leader has privately offered the option that the government could rollback the FDI in retail from 51 to 26 per cent, but this is not the consolidated view of the BJP but merely a section of it, which is perceived to be pro-reforms.

 

While sources admitted that neither the government nor the Congress party were expecting such a strong reaction to the decision, a meeting of the Congress core committee was held on Monday evening, which took stock of the logjam in Parliament and discussed various options open before the government.

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Option 2: Refer the matter to an Empowered Group of Ministers

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One of the options discussed was to refer the matter to an Empowered Group of Ministers and later bring it back when the timing was better suited to the government.

This was done when Trinamool Congress chief Mamata Banerjee had opposed the manufacturing policy. The matter was referred to an EGOM headed by Agriculture Minister Sharad Pawar and within a short period the policy was activated.

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Option 3: Chop, change, satisfy the Opposition

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Sources say that another option, which was discussed, was to make some changes that may satisfy the Opposition. But it is learnt that the prime minister is not agreeable to any dilution of the policy and wants it carried intact.

 

Commerce Minister Anand Sharma, prompted by Congress President Sonia Gandhi, has written to leaders of political parties explaining the policy and making it clear that 30 per cent of the items sourced by the chains should be from the small scale sector. Earlier, it was anywhere in the world but now they say it should be from within India.

He has also clarified that it is up to the state governments to accept or reject the decision to bring in multi-brand chains.

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Allies have united with the Opposition

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No tangible solution emerged during Monday's meeting between prime minister and Gandhi to discuss the Parliament logjam. While the Opposition has united against the government, its allies like Trinamool and Dravida Munnetra Kazhagam are strongly against the policy.

In addition, parties like the Samajwadi Party and the Bahujan Samaj Party which would come to the aid of the government are also in opposition with the Uttar Pradesh elections just around the corner.

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The Congress virtually stands isolated in Parliament

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The Congress virtually stands isolated in Parliament over FDI in retail though from outside, Indian industry is also pushing the cause, asking political parties not to paralyse Parliament.

 

Congress leaders privately admit that the party leadership has lost touch with the sentiments at the grass root level and this is particularly true of the Prime Minister's Office, which is pushing decisions on reforms without realizing that the Congress-led government is already in trouble over various issues like corruption, pressure to bring the Lokpal bill, etc and at this point it can ill afford a confrontation on any issue which is seen neither to be emergent nor urgent.

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