FDI: Govt determined to stick to guns

T he reforms thrust breached the pain threshold of allies and Trinamool chief Mamata Banerjee set a 72-hour deadline for a rollback of the FDI and diesel decisions. There were loud protests from non-Congress parties which may shortly call for acountrywide shutdown.      But the government, driven by a "perform or perish" mantra, asserted it will stick to its decisions which have been taken after factoring in the resistance of allies and opponents. There is a recognition that the cost of inaction will be far more severe, given the worsening finances and real threat of a ratings downgrade. With experts and its own top leadership feeling that the window for decisionmaking is shrinking fast, there was an air of determination in the government taking on allies and outside supporters who have crippled its options for months      On the upside, government can expect a roaring reception from the financial markets on Monday as a global rally triggered by monetary easing in the US and Germany's green signal to a Eurozone recovery package ties in with Friday's initiatives. This can prove to be a mood-enhancer for UPA as it heads into state polls in Himachal Pradesh and Gujarat.      The decision to leave it to states to allow foreign retailers is meant to blunt the opposition. However, it has been sought to be balanced by improving the terms for the foreign players.      Riders such as sourcing norms and rules to open stores in cities with a population of over one million have been tweaked for the benefit of foreign players, who can now pick up 51% stake in Indian joint ventures. So far, these players could only set up single-brand stores or enter the wholesale segment and sell bulk buyers such as canteens, restaurants and kirana shops.      Bowing to pressure from foreign players such as IKEA, the government eased sourcing norms for single-brand retail and permitted them to buy at least 30% of the goods from Indian industry, instead of the earlier stipulation that made purchases mandatory from small and medium units.      In case of civil aviation, where FDI is already permitted, the government has relaxed rules to allow foreign carriers to buy up to 49% stake in Indian airlines, a decision that throws a lifeline to ailing Kingfisher and other smaller players.      Prime Minister Manmohan Singh sought support for the decisions, saying they were needed to tide over difficult times and make India a more attractive destination for foreign investors.      "I believe that these steps will help strengthen our growth process and generate employment in these difficult times," he said. However,commerce and industry minister Anand Sharma asserted that the decision could not have been delayed any more for Banerjee's sake. He said the Trinamool boss had been consulted "more than once" and that the government did try to build consensus. The West Bengal chief minister's protests had forced the government to put on hold its November 2011 decision to let foreign retailers such as Walmart and Carrefour to set up multibrand stores.      Congress sources confirmed that Banerjee's representative, railway minister Mukul Roy, had conveyed the pullout threat to Ahmed Patel, political secretary to Sonia Gandhi. However, they were hopeful of bringing the West Bengal CM around, although it may take accelerating the financial package for West Bengal. The assessment is that other allies like DMK will fall in line as well.  Times View: Opposition to FDI a big mistake T hose who are opposing FDI in retail on the grounds that lakhs of small traders will lose out are making big mistake. They are forgetting that the loss for these traders will be more than compensated by the gains to hundreds of millions of consumers and farmers who will benefit from cutting out these middlemen. The big retailers that will result from letting FDI in should hugely improve efficiencies in the retail trade and the economy can only benefit from that. Political parties may have reason to focus on only one half of the picture, but the aam admi should not be misled by this. The gainers should vastly outnumber the losers. FDI IN RETAIL | WHERE STATES STAND      WILL ROLLOUT Haryana | Farmers will get good price and consumers will benefit. FDI in retail is welcome in Haryana, says CM Bhupinder Singh Hooda Maharashtra | State all for the reform, says CM Prithviraj Chavan. 'It will promote transparency, accountability and remove supply chain hurdles'  Delhi | 'Great step forward. Will mean quality food, jobs galore and equitable pricing,' says Sheila Dikshit Rajasthan | According to CM Ashok Gehlot, move will improve availability of quality goods, enhance competitiveness and  unlock true potential of the agricultural value-chain Assam | Happy with the decision; CM in favour of FDI in retail, says agriculture minister Nilamani Sen Deka      WON'T Gujarat | 'I don't know what PM is doing. Small businessmen will be forced to down their shutters now,' says Narendra Modi  Kerala | Ruling UDF and opposition LDF united in opposing FDI in retail  Odisha | Firmly against. CM Naveen Patnaik had last year called it 'ill advised and highly regressive'  Uttar Pradesh | CM Akhilesh earlier said his party may support FDI if convinced it'll help small farmers, but papa Mulayam ruled against it  Bengal | Ruling Trinamool has given Centre 72-hour to 'rethink' diesel price hike and FDI in retail  Madhya Pradesh | Move will hit small traders and grocers. 'We won't implement it,' says CM Shivraj Singh Chouhan  Bihar | Local retailers will be marginalized and millions of jobs will be lost, according to CM Nitish Kumar      NOT DECIDED  Karnataka | Jagadish Shettar govt will go  through contents of policy before deciding, says state industries minister Murugesh Nirani  Punjab | Will  study the fine print and then react, says CM Parkash Singh Badal  Jharkhand  | Will decide  after consulting people of state and local businessmen, says CM Arjun Munda