NEW DELHI: India’s government faced a test of its ability to survive as a minority administration yesterday as opposition lawmakers slammed its decision to allow in foreign supermarket giants such as Walmart. In a stormy debate ahead of a vote expected today, the Congress-led ruling coalition was lambasted by critics, including MPs from the Kolkata-based Trinamool party that walked out of the government in September over the policy.
Sushma Swaraj, the fiery leader of the main opposition Bharatiya Janata Party (BJP), told parliament that moves to open up the retail sector represented “a ditch of destruction” for farmers, shop owners and consumers. “Please fight for Indians, not foreigners,” Swaraj said, appealing to Prime Minister Manmohan Singh to drop the reforms. “Foreign companies are keen to expand their business as they see India as a big market but small business and traders will be wiped out,” she said. “No big retailer will compromise on profit, they will squeeze it from the farmers.” The Congress party believes it has the numbers to win a vote in the lower house, and hopes that victory will enable it to push ahead with further contentious reforms to tackle India’s slowing economy.
Parliament had been deadlocked during the current winter session, with opposition MPs holding protests to demand the vote, even though the reform requires only cabinet approval and has already been declared law. Kapil Sibal, a senior government minister, dismissed opposition concerns saying that each state could choose whether to allow in foreign supermarkets. “If you don’t want FDI in your state then don’t impose it,” he told parliament during angry exchanges. “We won’t impose it on you, so what is the point of this debate?” The new rules also stipulate that foreign multi-brand retailers can only open in the 53 Indian cities with populations of over one million people. Of these, only 18 are set to allow supermarkets, Sibal said. Supporters of the arrival of chains such as Walmart, Tesco and Carrefour say it would revolutionise shopping in India, with consumers offered cheaper food in large, modern supermarkets, as well as improving the wasteful supply chain. But the government’s plans have been attacked by critics as a sellout to corporate giants that will force small family-owned stores, which currently dominate India’s retail landscape, out of business.
The coalition lost its majority when the Trinamool party left over the policy earlier this year, and Premier Singh would suffer a major setback if he fails to win enough support from lawmakers. Congress is tipped to win the non-binding vote in the lower house today thanks to support from an array of regional parties outside the coalition, but it will face a tougher fight in the upper house in a vote expected on Friday.
Mulayam Singh Yadav, from the Samajwadi Party in Uttar Pradesh state, drew on Mahatma Gandhi for inspiration in opposing the reforms, saying that India’s independence hero protested against foreign imports. “When Gandhi set fire to foreign cloth, he said this was to benefit Indian weavers,” Yadav told parliament. Premier Singh’s pro-market reform push comes as the government faces a sharply slowing economy, a gaping fiscal deficit and high inflation, which has stoked pressure on the leftleaning alliance. The reforms package has been dubbed a second “big bang” following Singh’s efforts when he was finance minister to begin liberalising India’s economy to the world two decades ago.
While the retail decision did not require a parliamentary vote to become law, the government’s other proposals to open up the insurance and pensions markets to wider foreign investment will need lawmakers’ approval. — AFP