FDI issue: Good economics, but bad politics

In the end, it was a case of good economics being lost to the cause of bad politics. Having eaten the humble pie on the issue of permitting 51% FDI in multi-brand retail trade, crisis managers of the UPA now feel that the issue could have been handled better.

“The main problem was that our allies such as TMC and DMK were not on board. So, it was a question of either sticking to this decision and sacrificing the government or living for another day to fight the cause,” a senior UPA minister told DNA.

The Congress claimed that numbers would not have been a problem if the ‘push came to the shove’, but then the next general elections are more than two years away. “We would have been called arrogant, insensitive and what not. Besides, it was a question of carrying your allies with you or living with a permanent scare on the alliance,” a Congress MP said.

But now the writing on the wall is clear for the UPA in so far as reform is concerned. “We have to convince our allies before we take decisions,” the minister added.

The future for FDI in retail also remains grim. Even as Congress spokespersons seem reluctant to set any deadlines, the allies feel that with the promised broader consultations all set to involve CMs, the chances of a consensus are bleak. “Which of the BJP-ruled states would agree to this proposal now?” the minister said.