EVEN if the effects of foreign direct investments in organized multi-brand retail has been laid threadbare over the last one year since the time the Union government made strenuous efforts to cobble political support for increasing foreign stake in Indian retail business to 51 per cent, the political fallout is gathering storm. The most credible opposition to the FDI in retail might come from the principal opposition party BJP and its allies, but the Congress is more worried about its own allies in the UPA II jettisoning the FDI retail proposal.
Next week when the Parliament session begins the opposition parties have even more reasons to give the government a hard time. Till now it was all about corruption charges on various Union ministries and shady deals of the Gandhi family. But in this upcoming session the focus will shift to policy-making and economic reforms that would trigger an exodus from the UPA. The mega rally that the Congress held in Delhi with Prime Minister Dr Manmohan Singh, Sonia Gandhi, Rahul Gandhi and all the bigwigs of the party to garner support for the FDI in retail turned out to be a damp squib for obvious reasons.
To preempt any smart moves by the government opposition parties have given motions entailing voting in the Lok Sabha over raising FDI in organized retail. What could go in favour of the government is that the decision to allow FDI in multi-brand retail will not require Parliamentary approval. The government had announced the move last September and many hours have been spent in discussing it in the Parliament. Raising the foreign stake in Indian organized retail sector to 51 per cent would be an executive action. The problem area for the government would be the fact that if the opposition parties come together and have their motions adopted in Parliament, the ruling Congress and its allies will look that much less pro-people in the coming general elections. It would also morally defeat the Congress which has been the biggest champion of larger FDI stake in organised retail.
The most dependable ally of the Congress in UPA II – Tamil Nadu’s DMK – refused to be drawn into taking a position on whether it would vote on the motions related to FDI in retail. It also, quite significantly, refused to state clearly if its members of Parliament would vote on a no-confidence motion against the government. The charm of it all lies in the fact that the no-confidence motion against the government is being moved by erstwhile UPA-constituent Trinamool Congress. Mamata Banerjee had made it clear right from the start that inflation, anti-people policies and step-motherly treatment to West Bengal would decide the course of Trinamool Congress’ action in the near future. And true to her words the government might find itself on the mat over the issue of raising FDI in retail.
There have been open allegations made by various political observers that the FDI in retail was coming close on the heels of large amounts of money exchanging hands. These allegations would not have mattered if the image of the government was clean, but with a multi-crore scandal involving Union ministers breaking almost every week, every allegation lends credence to the fact that the Congress party is just filling up its coffers.
As of today, the government enjoys the support of 265 MPs, which include 18 are DMK MPs, in a house of 545. The support of Samajwadi Party of 22 MPs and BSP of 21 MPs including, the backing for the ruling coalition goes a little over 300 members. This is quite comfortable over the magic figure of 273 in Lok Sabha. But the government has to be wary of the tendencies of the mercurial personalities in BSP and SP in the comings days. If the general elections are drawing closer these two parties might not play ball with the Congress and risk losing at the hustings.
Likewise, the Communist Party of India-Marxist, which is not known for its steadfast policies as far as supporting Congress is concerned, might waver after all. CPM leader Basudeb Acharia made some brave noises recently about FDI in multi-brand retail when he said that his party’s “top priority” in the winter session of Parliament was to oppose the move.
The Left parties are to meet on November 16 to decide their strategy and could also move an adjournment motion on inflation in parliament. If one goes by the stated strategy of the Left parties, the issues like coal block allocations and Robert Vadra scandals in the land deals in cohorts with the Haryana government will be mooted in Parliament. But given the Left parties current disarray even in its home states of West Bengal and Kerala they might as well cave in than face early polls. Mamata Banerjee is still a tall leader in West Bengal even while her Trinamool Congress and eaten into the Left parties traditional vote banks in the last few months. The Left parties might also talk to the SP and the BSP for support in cornering the government, if one were to believe Acharia’s words.
The recent numbers have put paid to the lie propagated by the Prime Minister and the Planning Commission. The Deputy Chairman of the Planning Commission Montek Singh Ahluwalia had averred that the economic deflation had ‘bottomed’ out during the minute change in growth numbers for the April-June quarter of the current fiscal when compared to the corresponding quarter of the previous year (the change was 5.5 per cent compared to 5.3 per cent). But further slump in the economic growth story has given jitters to policymakers who were wholly dependent on the rise in GDP growth.
In the given circumstances the BJP, along with its trusted allies who have always maintained a categorical stand against raising FDI in organized retail owing to its ill-effects on agriculture as well as employment guaranteed by the unorganized retail sector, will do well to stay its course on opposing the government on almost all the contentious economic issues. With new revelations of corruption at high places coming to light every week it won’t be long before the government cracks under its own pressure.