SP punctures UPA hopes, aligns with Left against FDI in retail

Even as the UPA was patting itself in the back today over the broad consensus forged over Pranab Mukherjee resulting in his thumping win, the Samajwadi Party dealt the government a blow over FDI in retail.

In a letter sent jointly with the Left parties to Prime Minister Manmohan Singh, SP chief Mulayam Singh Yadav demanded that the UPA not proceed "any further" on bringing FDI in multi-brand retail. With the Trinamool Congress opposed to the move, the government had hoped to push through reforms in multi-brand retail with the help of the SP, though it had earlier opposed the same.

"We urge the government not to open up the retail trade to FDI any further," said the letter signed by Mulayam, CPM chief Prakash Karat, CPI chief Sudhakar Reddy, Forward Bloc's Debabrata Biswas, Revolutionary Socialist Party's Abani Roy and JD(S)'s Danish Ali. The CPM said the letter had been delivered to the PMO yesterday.

Mulayam's decision to join hands with the Left is bad news for the government, since his outside support is crucial for it to push reforms. In their letter, the SP and Left express apprehension that introducing FDI in retail will pave the way for an "MNC supermarket and hypermarket" that will displace small retailers in the domestic retail sector, "the second largest employer in the country after agriculture", employing over four crore people.

"Political parties across the spectrum are opposed to this move. Many state governments have also stated their opposition. In the absence of a wide-ranging consensus, we request you not to proceed with this decision," the letter states.

It also contends that one "Wal-Mart supermarket would displace over 1,300 small retail stores and render around 3,900 persons jobless".

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