Congress accuses BJP of deception, hypocrisy on FDI in single brand retail

The Cabinet on Wednesday allowed overseas investors to invest up to 100 per cent FDI in single brand retail trading and construction development

Shifting sands of Indian politics were evident on Wednesday as the Union Cabinet announced easing of FDI (foreign direct investment) rules for several sectors, including construction and single brand retailing.

Opposition parties, including the Congress, accused the ruling Bharatiya Janata Party (BJP) of “hypocrisy” and “deception” over the issue of FDI in retail.

The Cabinet decision was also opposed by  Swadeshi Jagaran Manch (SJM), an affiliate of the Rashtriya Swayamsevak Sangh (RSS) — parent organisation of the BJP. Other affiliates of the RSS, such as Bharatiya Mazdoor Sangh and Laghu Udyog Bharati, which have  opposed FDI in most sectors, said they needed time to study the decisions.

The Cabinet Wednesday allowed overseas investors to invest up to 100 per cent FDI in single brand retail trading and construction development without government approval. 

Following the development, the Congress fished out a booklet the BJP had published against FDI in retail trade when that party was in the opposition, and the Congress-led UPA government had attempted to relax FDI rules in retail trade in 2011.

“Deception, dishonesty and dodgy-ness of BJP leadership unmasked on FDI in retail,” Congress chief spokesperson Randeep Singh Surjewala tweeted. 

The party circulated the BJP booklet, in which the BJP had said FDI in retail would lead to job losses and displace more people than it would employ. In that booklet, the BJP had also pointed to the global experience of how companies like Walmart destroyed local manufacturing in countires that opened FDI in retail. Congress leaders said the BJP had then opposed all FDI, both in single as well as multi-brand retail.

However, the Congress had also made a U-turn on the issue of FDI. The party manifesto for the recently concluded Gujarat Assembly polls stated, under the section dealing with ‘industries, infrastructure and fisheries’, that the party “will review the FDI policy with an objective to protect the interest of the small traders and retailers against multi-national corporations with 100% FDI.”

In this context, the statements of BJP’s top leadership, when it was in the opposition, also make for interesting reading. According to the Congress, Narendra Modi, who was then the chief minister of Gujarat, said: “The UPA is a government of the foreigners, by the foreigners and for the foreigners.”

Regarding the Cabinet decisions, the Communist Party of India (Marxist) polit bureau said the step to liberalise FDI in retail trade would have harmful consequences for domestic traders and shopkeepers. “This measure indicates that the Modi government is moving towards allowing FDI in multi-brand retail trade. The BJP, while in opposition, was opposed to the entry of foreign companies into retail trade. Now being in the government, it has hypocritically reversed its position,” the party said.

RSS economic think tank Swadeshi Jagaran Manch convener Ashwani Mahajan said that any FDI would be opposed by it. 

“The need is for governments to come out of this GDP-centric, FDI-centric economic model, and move towards policies that truly lead to generation of jobs,” Mahajan, who was one of the economists to attend the meeting with the PM at NITI Aayog on Wednesday evening, said.