Not to raise debate till budget, UP bypolls.
Just three words — ‘consensus through consultation’ — in a statement circulated by finance minister Pranab Mukherjee at the all-party meeting this morning have ensured that foreign direct investment (FDI) in retail will now stay in limbo till the budget session and possibly even after the Uttar Pradesh assembly elections.
A brief note drafted of the government said no decision would be taken on FDI in retail until all stakeholders, including chief ministers and political parties were ‘consulted’ and a 'consensus' reached.
Top leaders of the Nationalist Congress Party told reporters since the BJP was in power in nine states and the Left Front in one, there was no chance of a consensus emerging. Left party sources said so long as political parties were part of the equation, consensus on the issue would never be reached.
Government sources said while 100 per cent FDI in single-brand retail would be notified soon, the issue of liberalisation of multi-brand retail would be put off till the two most important political challenges to the UPA were overcome — the passage of the budget and the Uttar Pradesh assembly elections, due in April-May.
The government, it was clear, had lost the battle, but had won the war. Parliament functioned normally on Wednesday with a discussion on price rise in both Houses.
But the domino effect of holding back FDI in retail was evident elsewhere. Sources in the ministry of heavy industry said the government had the ministry to put off disinvestment of Scooters India for the forseeable future. The Cabinet had, in May, approved the proposal to sell its entire stake in Scooters India. Ministry sources said the government did not want to go ahead with the decision in the current political climate.
Also in limbo is the issue of FDI in civil aviation, about which, a debate is on over its extent — 24 or 26 per cent. Trinamool Congress sources said, informally party leader Mamata Bannerjee had doubts about the ‘security’ aspect of the proposal. Sources close to former civil aviation minister Praful Patel said they were doubtful if the proposal would find traction because China, and West Asia-based airlines would be free to buy a stake in Indian domestic airlines.
The proposal also has implications for control, according to company law.
