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Tuesday, 29 November 2011 |
Once again the Indian Parliament was adjourned for the day after a united opposition
refused to relent on their demand for a complete roll-back of the FDI in retail. The meeting, led by FM Pranab Mukherjee failed to reach a solution, with both sides sticking to their stand. Political opposition to the move is based on the belief that the entry of global retailers will affect small stores and also lead to unemployment.
In fact, a few state units, where the ruling Congress is in power, like Kerala, have publicly raised their voice against the policy. However, despite these murmurs the Congress party has refused to accept the demand for a rollback of this bold initiative that is expected to ease inflation and bring in economic reform. Opposition parties like Bahujan Samaj Party (BSP) led by Mayawati in Uttar Pradesh, where she is also the chief minister, are making it an electoral issue keeping the forthcoming assembly elections in mind.
Interestingly, taking a U-turn, on FDI regulation, commerce minister Anand Sharma on Monday clarified that foreign players will have to buy at least 30 per cent of the products they sell from Indian small enterprises with fixed assets of less than $1 million. This is in contrast to last Thursday’s press note released by the ministry that said the 30 per cent sourcing from small enterprises “can be done from anywhere in the world and is not India-specific”.
It may be noted that India has already been questioned by the US and the EU at the WTO for the 30 per cent local content requirement that has been made mandatory for clean energy projects under the Jawaharlal Nehru National Solar Mission, since it violates provisions under the WTO’s trade related investment measures. |
