Prime Minister Manmohan Singh’s government on Thursday seemed closer to securing parliamentary assent for its decision to allow foreign supermarkets to set up shop in the country, ahead of a crucial vote in the Upper House on Friday. The ruling UPA has mustered the backing of Mayawati’s Bahujan Samaj Party (BSP), which said it would vote in favour of the decision, and the tacit support of Mulayam Singh Yadav’s Samajwadi Party (SP), which is set to abstain from voting.
The government will, however, need support from at least seven of the 10 independent members in the House to scrape through.
In the 244-member Rajya Sabha, the effective strength falls to 234 thanks to the the abstention of the SP, which has nine members, and Sachin Tendulkar, in Kolkata playing the Test match against England, is unlikely to vote. With the 15-member BSP on its side, the tally of the UPA with 95 members would reach 110. To cross the halfway mark, it needs the support of eight more votes from independents. Indeed, a close call.
If the government loses the vote in the Rajya Sabha, it would find it difficult to implement the decision to allow foreign direct investment in retail. Although government functionaries argue the Upper House's consent is not a must for endorsing the change in Foreign Exchange Management Act regulations notified by the Reserve Bank of India, that doesn't seem to be the case. The question of whether amendments of rules/regulations under Fema need the approval of Parliament would finally be left either for the Supreme Court (where a PIL on the issue is pending) to decide on. Sources said if the Rajya Sabha votes differently from the Lower House, the President might call for a joint session of both Houses for reconciliation of their views.
"Our party will vote in favour of the government tomorrow," BSP leader Mayawati said during the debate on the FDI policy change that is symbolic to India's attempts at a second wave of reforms. The government had won a vote on the issue in the Lok Sabha on Wednesday thanks to the BSP and SP abstaining.
“Important Bills are pending, the government will get the excuse to escape important issues (if disruption in the House continues). That's why looking at plus points, the BSP will vote in favour of the government," Mayawati said. The SP said it would abstain from a vote in Rajya Sabha too on the 'black law' and asked the government to think over the issue.
Participating in the debate, leader of Opposition in Rajya Sabha Arun Jaitley said opening up the retail sector for foreign control without reforms in the manufacturing sector was not the right thing to do. “We (will) cease to be a manufacturing nation. We will be consumers and our children will be sales boys and sales girls," said Jaitley.
The government had earlier looked set to lose the vote before the unexpected announcement from Mayawati to vote in favour of the retail reform. Mayawati said her decision was partly based on the the fact that individual states have the liberty to decide whether they want to allow foreign retailers on their soil.
A home run for the government on retail reforms would enable Manmohan Singh's government to focus on getting the other reform Bills such as raising the foreign investment limit in pension and insurance sectors passed. The government is also trying to put in place a fast-track clearance window for infrastructure projects that would strike trade-offs between development goals and environment concerns.