UPA divided as Cabinet meets on FDI in retail

Some Congress ministers including Veerappa Moily and Mukul Wasnik have opposed FDI in retail as the Union Cabinet meets on Thursday to decide on allowing Foreign Direct Investment (FDI) in the multi-brand retail. A decision in favour of the FDI will allow global mega chains like Walmart and Tesco to open shop in India.

Sources say the government will include safeguards to minimise the fears of small traders. The Cabinet is likely to decide on a panel report that looked into FDI feasibility last year.

It is also being reported that the Cabinet is likely to approve 51% Foreign Direct Investment in multi-brand retailing.

Sources have claimed that the government has also proposed to increase the FDI ceiling to 100% from the present 51% in single-brand retail.

The government, it is being claimed, will address the concerns by other political parties on matters like agricultural products still remaining with the government. The Cabinet will also talk about setting up retail branding outlets only in those cities which have a population of over 10 lakh as per the census.

They will also address concerns about textiles, electronics and a final call will be taken by the government on these.

The government, however, is likely to face stiff opposition, not just from Opposition parties like the Left and the BJP but also from it's own allies like the TMC and DMK.

West Bengal Chief Minister and TMC chief Mamta Banerjee said that since her party is just represented by one minister in the UPA cabinet, they cannot raise their voice against the majority.

Mamata said that she opposed the government's decision to allow FDI in multi-brand retail. "We don't support this, I don't support, even pension scheme also," she said in an interview with CNN-IBN.

"I have some reservations, we can express our views, we will express our views when the details will come to us," Mamata added.

The Left has also opposed allowing FDI in retail, saying it threatens small traders.

But the Deputy Chairman of the Planning Commission Montek Singh Ahluwalia had told CNN-IBN on Saturday that consensus was being built on FDI.