November 24th, 2011
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Congress split on FDI in retail sector

fdi-in-retailNew Delhi: Even as there are speculations that the cabinet that will meet today would decide in favour of Foreign Direct Investments (FDI) in multi- brand retail sector, there has also been opposing voices from within the UPA. Some Congress ministers including Veerappa Moily and Mukul Wasnik have opposed FDI in retail.

In the cabinet meeting to be held today the ministers would decide whether to approve of the 51 per cent FDI in multi-brand retailing. Sources have claimed that the government has also proposed to increase the FDI ceiling to 100 per cent from the present 51 per cent in single-brand retail.

If they decide in the affirmative, global mega chains like Walmart, Tesco and Carrefour will be allowed to open outlets in India. Most ministeries, including the finance and the textiles, are in favour of the industry ministry’s proposal to open the politically sensitive sector to foreign players.

The government, however, is likely to face stiff opposition, not just from Opposition parties like the Left and the BJP but also from it’s own allies like the TMC and DMK. West Bengal Chief Minister and TMC chief Mamta Banerjee said that since her party is just represented by one minister in the UPA cabinet, they cannot raise their voice against the majority.

Mamata said that she opposed the government’s decision to allow FDI in multi-brand retail. “We don’t support this, I don’t support, even pension scheme also.” “I have some reservations, we can express our views, we will express our views when the details will come to us,” Mamata added.

The Left has also opposed allowing FDI in retail, saying it threatens small traders.However, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia stated that a consensus was being built on FDI.

Sources say the government will include safeguards to minimise the fears of small traders. The Cabinet is likely to decide on a panel report that looked into FDI feasibility last year. The government may address the concerns by other political parties on matters like agricultural products still remaining with the government. The Cabinet will also talk about setting up retail branding outlets only in those cities which have a population of over 10 lakh as per the census.

They will also address concerns about textiles, electronics and a final call will be taken by the government on these.


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