01 December 2011

Why Manmohan Singh is so Adamant on FDI?

"FDI in Retail," a key word which is a buzz everywhere so popular that even newspapers and Google might consider to have a fragment of its large database preordained for it. The introduction of foreign retailers into the humongous potential market of India has become the "Apple of the eye." What makes the topic even more debatable is Prime Minister Manmohan Singh's adamancy to bring in the phirangis when there are many other grim issues that are in dispute to be heeded - inflation, the slowdown of the economy and the rupee depreciation has been an objective to criticize the PM. Leaving the elucidation on RBI and India's think tanks, the PM has personally got down marching his way for the FDI. Why?

Manmohan Singh

PM insisting on the FDI has put many threats in queue. Manmohan Singh's mutinous, yet determined will to bring in the supermarkets of foreign stores will actually make him mislay his allies, will be at the receiving end of collective anger of both the right- and left-wing opposition. Practically his adamancy could end up in potential collapse of the coalition itself, as the Trinamool Congress and the Dravida Munnetra Kazhagam, key allies also demanded a rollback. There is a high probability that if the government does not roll back the policy of allowing 51 percent foreign direct investment in multi-brand retail, BJP will stall Parliament for the remainder of its winter session, which ends on Dec. 21, the same party which once supported FDI in Retail back in 2002 when it was the leading party in a coalition led by former prime minister and key BJP leader Atal Bihari Vajpayee.

"We want a discussion in the Parliament on our adjournment motion on FDI in retail," tweets Sushma Swaraj. "My stand is the same as that of my party BJP & which is in the interest of the nation," tweets Narendra Modi.

"When in power they supported FDI in Retail now they oppose it. They opposed Computerisation when Rajiv Gandhi introduced it," tweets Digvijay Singh. "No one is forcing FDI in retail down anyone's throat. States not interested have right of first refusal. What could be more fair???," tweets Omar Abdullah.

"We have not taken this decision in haste, but after a lot of consideration. We believe that FDI in retail will result in the creation of many new employment opportunities in a range of sectors like food processing, transportation and storage," Singh said while rejecting demands for a rollback of the policy which has stalled Parliament.

"Any government in a democracy should follow the democratic process, especially on such a big-ticket item. They should have taken not only the allies into confidence on this matter but also the opposition, as it affects the entire country. Democracies are all about talking and not about bull-dozing," Dinesh Trivedi, Trinamool Congress leader and railways minister said in an interview to WSJ.

"Only Pranabda! PM not willing to meet his own party MPs and opposition for resolving Parliament logjam on FDI and other issues!" tweets Prabhu Chawla, Editor-in-chief, The New Indian Express.

 More than once Manmohan Singh has faced charges that he promotes American corporations and has great pleasure in promoting American interests in India. Back in 2008, Prime Minister Manmohan Singh had, without consulting the Indian Parliament or the public, promised the U.S. administration to purchase 10,000 MWe worth of LWRs from that country. Singh had also promised French President Nicholas Sarkozy to purchase French reactors, in return for his help to circumvent the Nuclear Suppliers Group's conditions. Without a liability law that lets the reactor manufacturers off the hook in case of a nuclear accident, these companies would not dare to do business with India.

Manmohan Singh
Former chairman of the Atomic Energy Regulatory Board, A. Gopalakrishnan, said "We have two generations of top-class nuclear scientists and engineers who have been painstakingly trained; we have the technological and industrial capability; and we have abundant raw materials," he said. "All these will go to waste if we predominantly start relying on the import of the highly expensive U.S. and French reactors."

The PM and his government had repeatedly proved that national interests are of least concern to them. The low compensation agreed against the Bhopal tragedy with U.S. based Union Carbide by Rajiv Gandhi in the past. "To say we have anyway compromised India's national interest will be a travesty of facts," Singh said apparently addressing the Left parties which have alleged that the bill had been drafted to suit American companies.

He said he had gone through the files of the Atomic Energy Commission and found that lots of scientists had concluded that India needed nuclear energy. "We were not in power then. But we (UPA government) signed the Memorandum of Understanding (later). This will not in any way compromise India's interest," he added.

Raising their vote against FDI in retail of India is one of the world's biggest trade unions. The Switzerland-based UNI Global Union has called the Indian government's decision to allow foreign retail majors into the country a "sell out". The Union, which has around 20 million (2 crore) members, said it is "appalled" by the decision, particularly the lack of regulatory oversight, and will stand with the trade unions of India in their fight against the move.

UNI pointed out that Walmart has taken what it called an "extreme position" against allowing unions. "..in its home country.. not a single worker is represented by a union among its 1.6 million employees..," it said, "Walmart and many other global retailers have a poor track record in labour relations and protecting workers. India be warned!"

"The requirement that the multinationals would have to source 30 percent of sales from local small and medium sized companies is not enough and not backed up by independent monitoring of investment and procurement. The government has rejected independent monitoring in favour of self-certification which UNI says is a system open to abuse," it said.

UNI and its affiliates from around the world will continue to support opposition to the decision in India which has given a green light to the multinationals without proper consideration, it added.

A number of occasions, the Congress government is been under the scanner for foreign deals. What makes them so favorable? From Rajiv Gandhi to Manmohan Singh the legacy still continues with foreign corporations paving their into India through the Indian government. However, some of these deals have proven fruitful as the Indo-U.S. relationship has grown positively. But questions still lingers, why the Congress government so favorable to foreigners?