The government’s decision to put FDI in retail on hold till a consensus is reached among all stakeholders could indefinitely stall the UPA-II government’s ambitious reforms agenda as well as its plans to raise Rs 40,000 crore via privatisation this fiscal.
A senior minister summed up the situation. “Not policy paralysis, we are now suffering from policy Parkinson’s (disease),” he said.
Another senior cabinet minister, who supported the decision to permit 51% FDI in multi-brand retail, on Wednesday said: "Looks like the decision will be implemented if Congress comes to power with own majority!"
A key Left leader added that it would be impossible to build a consensus on FDI. “Just count the number of parties and chief ministers opposed to it,” he said.
Congress managers, however, exuded confidence, pointing to how the UPA-I managed to push through the Indo-US nuclear deal, and complete its term, though almost everyone had written the deal off, especially after the PM famously said his was not a “one-issue” government.
The government has lined up a slew of reforms to send a strong signal to investors. These included FDI in retail and civil aviation and passage of the insurance, pension fund and banking reforms bills. Key UPA leaders feel some of these proposals may now be difficult to push through.
A senior official of the heavy industries ministry said the proposal to disinvestment shares of Scooters India, which had received cabinet clearance, may get delayed as many MPs have opposed the move.