FDI in retail: What will the government do now?

What will happen on Wednesday?

The United Progressive Alliance government is not withdrawing or rolling back the decision to allow 51 per cent foreign direct investment in multi-brand retail trade, but -- in response to the public outcry against this move -- is only 'suspending' it for now.

This is being done to let Prime Minister Manmohan Singh consult all stakeholders, including trade and farmers' bodies, small traders, small industries and consumers, before reaching a final decision.

This stand will be spelled out by Finance Minister Pranab Mukherjee at the all-party meeting convened on Wednesday to placate the Opposition to end the Parliament logjam when it meets after a four-day break, a top Congress source said.

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The exercise, however, appears doomed even before the two sides meet as the Opposition has made it known that it will not accept anything short of total reversal of the decision which is just not acceptable to the government: at least, till Tuesday night.

No Cabinet agenda: Intriguingly, the agenda for the Cabinet meeting convened on Wednesday evening has not been circulated as the government wants to study the Opposition's mind before deciding how the Cabinet handles the FDI-in-retail decision it had taken on November 24.

The ruling allies were groping in the dark on the issue for want of the agenda to know the mind of the Congress.

Top Congress leaders, including Congress president Sonia Gandhi, who held a series of meetings over the last few days to figure out how to break the impasse in Parliament felt the prime minister should try to remove the fears of all the stakeholders on the FDI-in-retail issue and implement the decision only after they are taken on board.

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The Congress leaders felt the the exercise can be completed before Parliament's Budget Session in February to notify the rules for opening up retail trade to foreign superstores.

Political parties, however, do not figure in the list of the stakeholders the government has drawn up for discussions.

Congress sources also said that this is so as their views are already known and the new exercise is basically to talk to every section of the society that is vulnerable to being impacted in any way by the foreign superstores entering the retail business in a big way.