Prime Minister Manmohan Singh on Wednesday spoke to leaders of allies Trinamool Congress and DMK after attending a meeting of the Congress core committee in a bid to find a way out of the impasse in parliament on the issue of foreign direct investment in retail trade.
According to Congress sources, Manmohan Singh explained to leaders of the DMK and Trinamool the need to avoid a political crisis over the FDI issue. This "was well understood" by the leaders of the two parties, sources said.
While the TMC has demanded a rollback of the cabinet decision to allow FDI in both multi-brand and single brand retail trade, the DMK has expressed reservations over the move.
Congress spokesperson Manish Tewari confirmed the contact with the key allies but did not take any names. "It is a matter of coordination between us," Tewari told reporters.
Sources said the Congress strategy will be to ensure that the DMK and TMC MPs do not vote against the government if an adjournment motion that entails vote on it comes up in parliament.
The Congress' core group also held a meeting. Manmohan Singh, Congress president Sonia Gandhi and other senior ministers and party leaders decided to continue efforts to break the deadlock in parliament without withdrawing the decision on FDI or diluting it substantially, sources said.
At the most, minor compromises like raising the cap on purchase from the small and medium enterprises (SMEs) in the country may be accepted, they added. The core committee is likely to meet again in the evening to take forward the discussions.
The union government had on Nov 25 decided to permit 51% foreign equity in multi-brand retail and 100% in single-brand retail. This would open the doors for global names like Wal-Mart.
The main opposition Bharatiya Janata Party (BJP) and the Left parties have opposed the move, arguing that the decision will adversely affect traders.
The standoff with the opposition has led to a stalemate in parliament, which could not run at all for the first seven days of the 21-day winter session that began Nov 22 due to various issues, including FDI in retail.
Addressing a convention of the Indian Youth Congress (IYC) in New Delhi on Tuesday, the Prime Minister defended the decision strongly.
"We have not taken the decision in a haste but after a lot of consideration. I am confident that the FDI in retail will help bring modern technology in the farm sector, less wastage and more jobs," Manmohan Singh said.
Finance minister Pranab Mukherjee met Congress MPs Wednesday morning to explain the details of the decision. Commerce minister Anand Sharma is likely to meet MPs from the UPA constituents Thursday morning to clear their reservations, Congress insiders said.
Various traders' organisations have called for nationwide protests on Thursday over the FDI decision. However, industry lobbies like the CII and the FICCI have extended full support to the cabinet decision.