Be courageous

After months of appearing like the walking wounded,unable to take any policy initiative,easily bullied by opposition and outside forces,the UPA government finally took a gutsy,reformist decision an executive order allowing foreign direct investment in retail. It was a decision with clear,long-term benefits to many diverse sections of the nation,but strongly resisted by one small,powerful constituency and their political champions. Opposition forces and even the Congresss allies have chosen a scorched-earth approach holding up Parliament,demanding that the decision be rolled back. Now,TMC leader and West Bengal Chief Minister Mamata Banerjee has gleefully announced that FDI in retail has been shelved,and the government is expected to speak on the matter in Parliament. Either way,this is an awkward place for the UPA to be in if it decides to suspend the question rather than risk losing the vote in the upcoming adjournment motion,it would still end up losing face.

Mores the pity,because retail reform could be an electorally saleable issue. The BJP,having publicly and enthusiastically supported FDI in retail in the past,has now opted for narrow,interest-group politics. The Lefts objections are rote and short-sighted,and fail to see the huge benefit to farmers,if layers of intermediation are cut out by organised retail. It would lower prices for the consumer and improve our currently inefficient supply chains. What is more,the order leaves the FDI decision to the states,and those who cannot get over their ideological resistance are free to reject it. The government did exert itself and make a real effort to convince many disgruntled sections explaining how its benefits would far outweigh the costs. A few days back,the prime minister laid out the rationale again,as did others in his government. And yet,now the UPA finds itself at this sorry pass again.

If it backs down now,it loses all credibility all parties will then operate with the assumption that the government will cave under concerted pressure,that it will disavow its own beliefs because of a tough-talking ally or a determined opposition.