Why stake all on moth-eaten FDI?

By Swapan Dasgupta

The motives may be extremely cynical but there is no question that the attempt by the Prime Minister and the Finance Minister to engage with the principal Opposition party prior to the winter session of Parliament, will be welcomed by those committed to strengthening the institutional foundations of Indian democracy. With a fragile majority that can be overturned by either design or accident, the Government is aware that it cannot realistically hope to get fresh legislation through unless it commands bipartisan support. And unless it can show tangible progress in securing the passage of ‘reforms’ legislation, the Government of Manmohan Singh may as well retreat into history.

Sandwiched between its visceral loathing for the BJP and its desperation to show that there is still life left in the UPA, the Government has prudently chosen to sup with the representatives of forces it regard as satanic. It marks a change. For quite some time, a civil relationship between the Government and the BJP had broken down on two counts. First, say those in the know of the room temperature in Race Course Road, the PM regarded L.K. Advani as being wilfully discourteous to him on a number of occasions. An incident which is said to have particularly rankled in the minds of the PM involved the NDA chairperson allegedly throwing a document at the PMs table. Secondly, it is said that the PM was livid with Leader of Opposition Sushma Swaraj’s ‘mota maal’ comment in the context of Coalgate.

Whether these constitute the real reasons for keeping any meaningful Government-Opposition engagement on hold, or are being cited as justification for the Congress’ pre-determined haughtiness is a matter of conjecture. What is, however, undeniable is that during earlier sessions of Parliament, when the Government had a comfortable working majority in the Lok Sabha, the UPA-2 leadership never felt a need to forge a cross-party consensus on issues of governance. However, now that it faces difficulties in securing the passage of economic legislation, an attempt is being made to reach out to the Opposition. The Government knows that there are limits to talking up the economy and unless pious intentions are accompanied by concrete action, there is every possibility that the mood of cautious optimism will disappear.

Granted that the overtures by Manmohan Singh and P.Chidambaram are governed by expediency and self-interest, how should the Opposition react? The Opposition has a litany of grievances against the Centre. Apart from non-consultation, there are grave charges centred on the Centre’s duplicitous conduct in matters governing the treatment of non-Congress-ruled states, not to mention the blatant misuse of central agencies such as the CBI. Together, these have contributed to a vitiated environment and the feeling in Opposition circles that blind hostility is the best way to confront the Government.

Then there is the entire corruption issue. Although the Opposition momentum on corruption and cronyism has been somewhat checked by the turbulence in the BJP over Nitin Gadkari’s unwillingness to do the honourable thing and retire to Nagpur, the Parliament session does give the entire Opposition a chance to put the Government on the mat on issues ranging from Robert Vadra and the National Herald properties to the Swiss accounts in HSBC. But the moment the Opposition tries to raise any of these issues, the Congress is bound to respond belligerently and the resulting bedlam is certain to dash all hopes of any constructive engagement. For the Congress, ‘reforms’ are important but not as important as the honour and prestige of the Gandhi family.

Then there is the role of the FDI in multi-brand retail which, for inexplicable reasons, the Congress has chosen to make the signature tune of its entire ‘reforms’ thrust. Regardless of the perceived economic benefits that the entry of retail giant Walmart brings to India, the fact is that political India does not believe that such an entry is desirable at this time. A vote in Parliament will clearly reveal that the Government is in a minority on this issue, which is why the UPA’s political managers will do their best to prevent any voting. But, having smelt an advantage and the Trinamool Congress determined to engage in fierce battle on this issue, why will the Opposition let the Government escape embarrassment? Would the Congress have shown similar generosity had a BJP-led Government pushed through a major move without bothering about the sense of Parliament?

On the retail trade FDI question, the Government finds itself in an awkward bind. As a symbol of ‘reforms’, this is a measure whose effects will be largely symbolic. It is doubtful if the measure will result in any significant quantum of FDI. Neither is there any evidence that the state-centric measure will make distribution channels for agricultural produce more efficient. If good reforms involve good politics, the Government should actually be willing to eat humble pie on this issue and instead concentrate on effecting changes in pensions, insurance and ensuring the passage of the Forward Contracts Regulation Bill which was mooted in 2006.

It is inexplicable why the Government has made the moth-eaten FDI in retail a prestige issue, unless, of course, we are to read grave meaning in the recent revelation that Walmart played the bribery game in India. If the Government gives in to the Opposition on this issue, its chances of addressing the more substantial reforms becomes brighter.

Sunday Pioneer, November 18, 2012