The UPA government has decided - in the face of stiff resistance from both its allies and the Opposition - to defer implementation of the cabinet decision to allow 51% FDI in multi-brand retail.
The aim is to save the winter session of Parliament that has already seen nine days of turmoil and inaction and to appease the second largest constituent - after the Congress - in the ruling combine, Mamata Banerjee's Trinamool Congress.
Top government sources told HT the decision would be announced in Parliament next week after a formal decision taken by the cabinet. Technically, it means the government will not notify the decision.
Chief Congress spokesperson Janardan Dwivedi said, "The party welcomes all steps to break the stalemate."
But BJP and the Left chose to wait for a formal announcement.
Banerjee, however, didn't wait. At a press conference in Kolkata, she said: "Pranab Mukherjee (finance minister) informed me the cabinet decision on FDI will be suspended until and unless a consensus is evolved."
While commerce minister Anand Sharma was quoted by NDTV as saying there would be no hold-back or rollback of the FDI policy, Banerjee responded: "The matter is crystal clear and you may ask Pranab Mukherjee."
Earlier, after the Congress core committee decided to hold further talks with the Trinamool, Mukherjee flew to Kolkata to convince Banerjee. But since she chose not to meet him, they spoke on the telephone twice.
One of the likely scenarios now is that while the government managers seek more time to negotiate with the allies, the Lok Sabha Speaker can rule out the demand for an adjournment motion, citing suspension of the policy.
Even if the adjournment motion is accepted, the government can now enjoy the support of its relieved allies.