Cabinet divided over FDI in retail sector

Cabinet divided over FDI in retail sector

Market dilemma: Senior UPA ministers question governments decision

In addition to this, about 40 per cent of the cabinet members, almost all of them belonging to the Congress party - the main UPA partner - took strong exception to the government approving the much-debated issue in a hurry in the cabinet.

Deccan Herald had, in Friday’s edition, reported that ministers raised objections over the FDI issue in the meeting. The issue saw huge protests in the House of Parliament on Friday, leading to adjournments. Most of the non-UPA parties are opposed to multi-brand retailing. Among those who raised objections to the FDI proposal included senior Ministers A K Antony, S Jaipal Reddy, M K Alagiri, Jairam Ramesh, Virbhadra Singh, Vayalar Ravi and Kishore Chandra Deo.

The cabinet was said to be a divided house with ministers such as Pranab Mukherjee, P Chidambaram, Anand Sharma and Kapil Sibal making a spirited defence of the FDI proposal. Prime Minister Manmohan Singh did not speak much.

Several of the anti-FDI ministers took serious objection to clearing the issue in a hurry, demanding that more discussion was needed in the cabinet on controversial provisions. Some were opposed to clearance given to the FDI before the Uttar Pradesh elections. To this, a senior minister shot back saying that all newspapers have written that the proposal would be cleared. If it is not done, sensex will drop by 500 points. “Are we prepared for that?”, he is learnt to have asked.

Every time an objection was raised, a pro-FDI minister would retaliate, sources said adding that the anti-FDI ministers complained of being shouted down. Some even wanted to know whether the proposal had the nod from UPA chairperson Sonia Gandhi.

Trivedi, the lone Trinamool member in the cabinet, complained that his leader, West Bengal Chief Minister Mamata Banerjee, was not consulted. Sharma told him that he met Mamata and convinced her of various provisions before the meeting. Trivedi, who submitted a dissent note, was also told that opposition by one state government could not be allowed to deprive others who were in favour. Along with Jairam Ramesh, ministers such as Antony and Ravi were not in favour of allowing 51 per cent FDI , which gives the controlling stake to the foreign investor. They argued that the cap should not exceed 49 per cent.

Some were critical of the plan to allow retailing in cities with a minimum of 10 lakh population. “This means as many as 53 cities will be thrown open to this sector. Tomorrow, towns with five lakh may be thrown open to multi-brand retailing,” a minister told the meeting.

I will set Wal-Mart stores on fire: Uma

Firebrand BJP leader Uma Bharti on Friday threatened to set on fire Wal-Mart stores if the retail giant opens its shops in the country after the Centre gave its nod to 51 per cent FDI in multi-brand retail, reports DHNS from Lucknow.

“I will myself burn the Wal-Mart stores if they open shops.... I am prepared to go to jail,” she said. “The benefits of economic liberalisation has reached only 10 per cent of people... the decision to allow retail giants will destroy local markets and render crores of people unemployed,” she claimed.

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