New Delhi, Sept. 14: Prime Minister Manmohan Singh’s forceful argument in favour of reforms was taken as a royal fiat by the cabinet today with no minister expressing dissent despite misgivings both in the UPA and a section of the Congress over allowing FDI in multi-brand retail.
The Prime Minister had the complete backing of Congress president Sonia Gandhi and general secretary Rahul Gandhi, who felt the government was standing hamstrung for far too long and getting battered from both sides — the reformists as well as the no-changers.
Asked if there were differences in the cabinet, a senior minister said: “Retail FDI was not on the listed agenda and Anand Sharma circulated it at the last minute. Probably, nobody except Singh was prepared for it. But A.K. Antony, whose opposition to this decision is well known, remained silent. Ambika Soni, Kamal Nath and Vayalar Ravi asked some questions but they were more in the form of enquiry than critique or opposition.”
Another minister said: “We had to go through this, we can’t be bullied endlessly.”
Some sources said Sonia had expressed misgivings about foreign presence in retail earlier, influenced by the perception that it would imperil mom-and-pop shops in the country. But the sources said the “fears were addressed” when Singh persuasively argued that the economy direly needed such decisive steps.
Sources said Rahul was particularly firm when the issues were discussed earlier, preventing the Congress from making the customary noises over the steep hike in diesel prices and the radical decision of limiting the number of subsidised cooking gas cylinders to six a year.
The party officially backed the government, contending that it was an unavoidable step, a response dramatically different from the usual emotive appeals for some relief.
The Congress core committee had discussed the whole gamut of political and economic situations over the past few weeks and decided to go ahead, acknowledging that indecision and playing safe yielded little political dividends.
Younger leaders led by Rahul wanted the government to do everything to protect its USP, which they felt was high economic growth. These leaders had been campaigning for FDI in retail as they believed this was in the larger national interest.
The Congress leadership was sufficiently convinced that it would be able to expose the BJP’s opportunism on both FDI in retail and LPG.
Commerce minister Sharma today said the Vajpayee government was ready with a cabinet note on 100 per cent FDI in retail without any conditions and all its state governments desperately wanted it.
Party spokesperson P.C. Chacko revealed that the parliamentary standing committee on petroleum and energy, which had members of the NDA, recommended the six-cylinder decision.
So aggressive was the commerce minister today that he condemned the attitude of indulging in partisan politics over such policy decisions and said: “The Prime Minister has negated the motivated campaign of projecting India in a bad light. Those who did it have done a great disservice to the nation.”
While Sharma argued at the cabinet meeting that the FDI decision would ensure better post-harvest management, create infrastructure, bring modern technology and jobs, Singh explained how crucial these measures were to sustain high growth.
The Prime Minister was rattled by the perception of policy paralysis, symptoms of weakening economy and the threat of credit-rating downgrade and he convinced the party that this was perhaps the last window of opportunity available to the government to turn the tide.
The government also clearly told the party that sustaining welfare schemes and introducing the ambitious food security bill would not be possible without recovering the growth momentum.
Party spokesperson Rashid Alvi said: “Allowing FDI in multi-brand retail is a decision in the national interest. It will help both the farmers and the consumers and create jobs. The government has taken the decision after serious thought.”
The commerce minister, too, emphasised that all the stakeholders — associations of farmers, consumers, businessmen, civil society and chief ministers — had been consulted. He agreed that some states had reservations but insisted that they were free to reject FDI in their territories.