The proposal to allow FDI in the retail industry has been abandoned. But it may not be a final burial. The Left once thought that Prime Minister Manmohan Singh had said goodbye to the nuclear energy deal with the US and was happy. But the Prime Minister had the last laugh in the end. It is hoped that he will prevail again on the FDI in retail issue. The advantages are many. India needs organized retail. Foreign investment in retail will bring in capital, expertise and competition. All this will boost the Indian economy. The produce of farmers will fetch higher prices. The supply chain will be shorter and more efficient. As a result, the consumer will be benefited, price-wise and in getting easier access to essential goods. New investment will pour into manufacturing and more jobs will be created in the sector. Giving in to the opposition and dropping the proposal would seem unwise and pusillanimous on the part of the UPA government.
The government for its part showed regrettable vacillation. There was no unanimity on the subject even in the so called core committee which is a link between the government and the ruling Congress Party. The Congress lacks an institutionalised consultative mechanism to rope in the allies on major policy matters. Its performance in Kerala is different. There the party’s liaison committee ensures durability. The Congress at the Centre is unable to introduce cohesion in the coalition and is not confident despite its absolute majority in Parliament. Of course, finding a consensus on a populist issue is an elusive objective. Fissures in the coalition are bound to show in such cases. What is remarkable is that the Trinamul Congress with its 20-odd MPs led by its stubborn leader, Mamata Banerjee, appeared to have clinched the issue on FDI in retail. The BJP and the CPI (M) gave her unstinted applause on the sidelines.