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PM got past a split cabinet to push retail FDI

Posted on 26 November 2011,    
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It wasn't just a vocal opposition that was against the Cabinet's decision to allow 51% foreign direct investment (FDI) in multi-brand retail business. The cabinet itself was split down the middle, which had an animated — even heated — debate on the pros and cons of opening up a sector that was so far considered politically too sensitive for farmers, small traders and consumers.

Finally it took the prime minister to step in and send out a clear message: this must be done, in tune with his renewed push for liberalisation..

The most vociferous against the decision was railway minister Dinesh Trivedi of the Trinamool Congress. Even Congress ministers, including defence minister AK Antony and rural development minister Jairam Ramesh, are said to have cast their doubts on the issue.

Antony reportedly said Kerala, his home state, wouldn't accept the proposal. Ramesh pointed to the UP polls to show the decision's politically "inconvenient timing", though agriculture minister Sharad Pawar told him that the Congress wasn't not "expecting a rich dividend" in the state.

The proposal was backed strongly by finance minister Pranab Mukherjee, among others. He said there were enough safeguards to address concerns.

In fact, Mukherjee is believed to have lost his cool at Trivedi, who insisted that his party would never accept foreign companies coming and teaching "our farmers the basics of agriculture" and that multi-brand retail would take away jobs.

Mukherjee retorted, "You are a first-time MP and first-time minister. You do not understand the issue."

Trivedi then left the meeting, denying his party was creating a fuss. It took three cabinet ministers to persuade him to return.

Ultimately, Prime Minister Manmohan Singh closed the matter — "we can't delay it any further," he said, even while acknowledging that there were issues with the matter of FDI.


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