After talking to Pranab Mukherjee on phone, TMC chief Mamata Banerjee announced in Kolkata that the Centre was putting the policy in abeyance.
The coup de grace came from West Bengal chief minister Mamata Banerjee who announced in Kolkata that the central government had told her it was suspending the implementation of 51 per cent foreign direct investment (FDI) in multi-brand retail.
Banerjee said she had spoken twice on the phone with Union Finance Minister Pranab Mukherjee who told her of the Centre’s call to keep in abeyance the decision on FDI in retail until a consensus was evolved. “Pranab Mukherjee is in Kolkata on Saturday. He wanted to meet me but I had other commitments. We spoke twice on the phone and he told me the retail issue is being suspended until consensus is evolved”, she said in a media briefing at the Writers’ Building.
Reacting to her announcement, top ministers said FDI in retail had been ‘held back”. “Holding back doesn’t mean rolling back” said a union minister. He said it was essential for optics that Banerjee announce the government’s decision, but said all parties needed to have an open mind on the issue.
Banerjee’s Trinamool Congress (TMC) is the second largest ally in the UPA coalition. TMC has 18 Members of Parliament (MPs) in the Lok Sabha, second only to Congress, which has 207 MPs.
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Banerjee was vocal in her opposition to the FDI move from the beginning and had been exerting pressure on the Congress.
The drama heightened with traders taking to the streets and the Winter Session of the Lok Sabha being wiped out because of the united opposition to the move. A meeting of the Core Committee (comprising the Congress party and the government) on Friday night asked Mukherjee to speak to Banerjee and assess for himself how flexible she was.
Mukherjee tried hard to meet Banerjee, even visiting her ailing mother in the hospital. But he could not meet her. He then spoke to her on the phone and cited all the arguments in favour of the move. Banerjee said her understanding from her party was that FDI in retail would harm the interest of the farmers.
He then spoke to her on the phone and cited all the arguments in favour of the move. Banerjee merely said her understanding from her party was that FDI in retail would harm the interest of the farmers. There was no further discussion after that.
On Thursday, Banerjee took the Prime Minister’s call after making him wait for a day. She told him in no uncertain words that while she did not want the government to fall she would not support the government on FDI in the vote. On Saturday, Banerjee appeared the stronger of the duelling coalition partners when she congratulated every trader who had protested the move, saying, “I think the matter has been resolved”.
She further said that people could rest assured that the decision to put FDI off is not temporary.
| THE STORY SO FAR Jul 2010 The Department of Industrial Policy & Promotion floats discussion paper on allowing FDI in multi-brand retail Nov 2010 A committee under the Consumer Affairs Ministry is formed to ascertain the impact of FDI in multi-brand retail Jul 2011 A Committee of Secretaries under Cabinet Secretary Ajit Kumar Seth gives in-principle approval to 51% FDI in multi-brand retail Nov 24 Cabinet clears the decision to allow 51% FDI in multi-brand retail and 100% in single-brand retail. Mamata Banerjee-led Trinamool Congress expresses its opposition, says UPA allies were not consulted Nov 25 Commerce and Industry Minister Anand Sharma says FDI in retail will generate 10 million jobs in the next three years Nov 27 Non-Cong states lead the protest. Uttar Pradesh Chief Minister Mayawati and Tamil Nadu Chief Minister J Jayalalithaa say no to multinational retail chains on their turf Nov 28 Prime Minister calls an all-party meeting to break the logjam over the issue. Commerce minister announces FDI would be allowed only if 30% of products is sourced from India’s micro, small and medium enterprises Nov 29 At the Youth Congress meeting, PM supports FDI in retail, but Congress president Sonia Gandhi makes no comments on the issue in her address Dec 1 Sharma rules out rollback and says protest against the proposal are all “BJP sponsored” Dec 2 PM asks Mamata Banerjee to reconsider her opposition. Banerjee, however, refuses to back off |
“It is not a temporary decision. I even asked him (Pranab Mukherjee): what will happen if the government withdraws this decision later? He has assured me that nothing of that sort will happen until we reach to a consensus,” she said.
Those in Mamata Banerjee’s inner circle claimed that the rollback of the FDI decision is a huge political victory for her given that she has been able to block a marquee policy decision of UPA-II while being able to score brownie points with farmers - her core constituency.
Twitter was abuzz after the announcement with several tweets including those by TMC Rajya Sabha MP Derek O’Brien extolling Mamata Banerjee’s success in blocking the decision.
The BJP, which was hoping it would be the one to claim the government’s scalp, was initially taken aback but recovered quickly. "There is no official conformation of the statement made by government. However, if such a decision is made, it is a good step and we will support it. But if there should be any rollback, the announcement should come from the government not from the alliance," said Siddharth Nath Singh, BJP spokesman.
But the government was undoubtedly in an uncomfortable position. "There is no question of a rollback. This is unprecedented in an executive decision. Government will take the call at an opportune moment," a top government official from the Ministry of Commerce and Industry told Business Standard. Making the best of a bad job, party spokesman Janardan Dwivedi said the Congress welcomed any move that ended the stalemate over the issue. He said consensus would guide future decisions. The government is hopeful of notifying the decision after the Parliament session ends on 22 December.
Mamata Banerjee has intervened to veto a government decision for the third time in the two and a half years of UPA rule. She led her opposition to the petroleum price hike be known publicly. After giving assurances to the Ministry of Water resources that she would not oppose the decision, she publicly embarrassed the Prime Minister and put India in a spot on the issue of sharing Teesta waters just before the PM's visit to Bangladesh. This is her third intervention.