The perception that reforms can be implemented only by stealth has was reinforced by the power play over FDI in multi-brand retail in the Rajya Sabha.
With BSP abandoning its position on allowing foreign super markets, articulated by its representative in the Lok Sabha, to back the Centre, the government now has the numbers to ensure a formal roll out of the new retail policy.
The voting over the issue in the Rajya Sabha recently will end the decade-long wrangling in the political arena on allowing foreign supermarket chains like Wal-Mart, Tesco and Carrefour to set up shops in India.
Although AIADMK vowed to roll back the policy ‘when a dispensation backed by it forms a government at the Centre,’ this line did not have traction among other parties. The main objection was on the timing of the policy – inviting big chains without reform in the manufacturing sector and a regulator’s protection for local players.
They cited the experiences of other economies that allowed super markets to drive home their point that domestic producer as well as consumer will be left to the mercy of the pricing mechanism of multinational companies.
But Mayawati’s support is certain to help the government vote out this argument in the Rajya Sabha. Congress still has a tough task as managing political opinion in favour of the policy will not be easy as mopping up a majority in Parliament, where extra-political issues play a major role in deciding the outcome.
Barring Congress, whose members stoutly defended the policy, no other formation was willing to see it as something that can give a big boost to the economy. Those not convinced about the government’s sequencing of the reform menu argue that the Centre should have taken up the controversial retail issue after ensuring progress in financial sector reform.
“The government needs the support of the Opposition for pension and insurance bills. If the current mood in the Opposition is anything to go by, they are certain to insist on syncing the two bills with recommendations of the standing committee on finance,” said a Congress leader. The government, however, appears to be banking on the worries in a section of BJP over persisting with an anti-liberalisation line.
“BJP’s middle class constituency may not like the party to toe an anti-reform line and this could provide the government an opening,” said the Congress leader. As of now, BJP seems determined to stall any changes in the pension and insurance bills, cleared by the standing committee. “We had one round of talks with the finance minister.
We have expressed our reservations over these bills to him,” said a leader who participated in the talks with finance minister.