The gridlock in Parliament over foreign direct investment in multi-brand retail is set to ease with the Manmohan Singh government—armed with ally DMK’s support—dropping its resistance to a discussion under a rule that necessitates a vote.
The détente over FDI could see fresh discussion between the ruling coalition and the BJP over the winter session’s legislative agenda, with parliamentary affairs minister Kamal Nath expected to meet leaders of the opposition Sushma Swaraj and Arun Jaitley .
The government is keen to pass reforms-related legislation like insurance, pension, companies and banking bills. These are seen as being vital to the UPA’s bid to improve India’s investment prospects and beat back a threat of a downgrade by rating agencies. The government hopes to limit disruptions during their passing.
The breakthrough in the four day stalemate in Parliament came with DMK chief M Karunanidhi announcing that despite a sense of “bitterness” over supporting FDI in retail, the party would vote with the UPA keeping in mind the consequences of the government falling.
Karunanidhi’s invocation of the danger posed by a “communal” BJP did not surprise UPA circles as the DMK’s alleged antipathy to global retailers is not seen to be as deep rooted as it appears to be. The DMK’s ties with the Congress are fraying but it cannot risk an election.
The UPA’s stand on a vote in Parliament on FDI was sealed at a meeting of the coalition’s coordination committee, with senior ministers saying the precise rule under which a discussion takes place will be left to the presiding officers of the Lok Sabha and Rajya Sabha. Rahul Gandhi too attended the meeting in another affirmation of his growing role in Congress and coalition affairs.
The ruling coalition has the support of about 260 MPs in a 543-member-strong Lok Sabha. With the Samajwadi Party’s 22 and BSP’s 21 MPs, its numbers cross 300, comfortably more than the required
272. In the Rajya Sabha, the UPA and its allies have 95 MPs. The ruling alliance needs the BSP’s 15 and Samajwadi Party’s nine MPs in a House with an effective strength of 244. The Upper House arithmetic appears to rule out an abstention by Uttar Pradesh outfits if they are to help the government. Discussion on FDI likely early next week
The shift also means that the BJP-Left combine’s move to team up and insist on a vote on FDI policy paid off. The vote is expected to see parties like AIADMK and BJD opposing the government, deepening the impression of a near vertical split in political opinion over FDI.
Although UPA leaders claim the standoff over the FDI policy was not as grave as it was made out to be, it needed some persistent negotiations to bring all supporters on board. Space had to be created for allies like DMK to retreat from their public opposition to FDI.
The government managers can pat themselves for getting the DMK, SP and BSP—all of whom participated in a nationwide opposition bandh against FDI last December— to back the UPA on a vote in Parliament. The discussion is likely to take place early next week.
In the end getting outside supporters SP and BSP on board proved less challenging than anticipated with Congress sources pointing to the regional parties keeping their distance from recent Opposition sponsored anti-government protests.
Not all the bills are likely to be passed, but the government will like to prioritize some along with taking the advantage of a freshly minted political consensus over the Lokpal bill to ensure its passage at least in Rajya Sabha where it is pending.
Finance minister P Chidambaram has repeatedly told Congress and in UPA meetings that the government needs to pass the important legislation as there are limits to executive action. The passage of important bills can also persuade the Reserve Bank of India to lower rates.
So far, the RBI has pointed to the high deficit and inflation to plead its inability to lower lending rates.
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