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Published On:22 December 2011
Posted by Indian Muslim Observer

Federal Bargains, Retail Market

By Amna Mirza

The winter session of Parliament was speculated to be on fire due to debates over the Jan-Lok Pal Bill and the final outcome of Team Anna- UPA II Government duel. What emerged surprisingly was the decision to allow foreign direct investment in the retail market. The phenomena saw not only the opposition coming forward with its sacred exercise of criticizing the government but also the key allies of the UPA like Trinamool Congress and some Congress Member of Parliaments expressing displeasure over it. The government has showed its readiness to debate on the issue but the opposition is firm on its demand for vote on the move to increase the cap on FDI in multi-brand retail to 51% and allow 100% foreign ownership in single-brand stores.

In this spectrum, what was remarkable was a remarkable degree of voices of dissent from the few states in the Indian federal apparatus. Kerala emerged as the first Congress ruled state to oppose FDI in retail. Followed by the Chief Ministers of Uttar Pradesh and Tamil Nadu - Mayawati and Jayalalithaa - casting a doubt over the concealed nature of the proposed benefits tendered by FDI in retail, namely that it benefits the foreign players vis-a-vis indigenous players. Further, the iron man of Bihar, Chief Minister Nitish Kumar opposed it with his party JD (U) putting its demand for adjournment motion in Lok Sabha.

India is a parliamentary federal democracy, with a bicameral union legislature. The rapid pace of globalization has a profound impact on Federalism which seeks to manage sovereignty with the dual rule. The states within the Indian Union are heterogeneous. With the beginning of the coalition government of the multi-party system and the economic decentralisation, the states have found a new space for themselves than before. This idea of states as independent sites of growth can be captured from the imagination of the Globalisation theorist like Kenichi Ohmae, where she argues that rise of states/sub-units, in the global era needs to be seen as geographical clusters and as potential engines of huge regional economic growth.

In the Indian context, the process of liberalisation juxtaposed with rise of coalition forces has tilted the balance towards a more decentralised federalism where the states have a renewed concern for their distinct development The nucleus of power lies in New Delhi, yet a certain atmosphere has been created whereby states vie for their due space in policy matters that cast a spell on their issues. Further, one can sense that there is a certain degree of reordering of state-market relations with the independent state demands coming up.

In the ongoing debate what came forward was a mosaic of a complex idea of national interests. If the idea of containing inflation and making our retail market to catch up to international standards was pointed by the Union Government, the states debunked the notion. The differences of opinion came up when the Kerala Chief Minister Ramesh Chennithala feared how this decision will give political advantage to the Left forces to factor in small and retail players. Uttar Pradesh and Tamil Nadu further opposed it primarily leaving no stone unturned to gain political mileage over the current regime by getting in the ‘foreign’ factor. Bihar echoed the idea of larger public interest wherein the state government did not allow Special Economic Zones (SEZs) in the past and as a matter of principle agreed to stick to its policy principles and opposed the thought process of the Prime Minister Manmohan Singh. Further amongst the political circles in New Delhi, the Left Parties debated how the executive act in a manner that is at odds with the collective responsibility of the cabinet as enshrined in a parliamentary democracy. There are factions that pointed how employment, productivity and technology are not catered to by allowing FDI in retail.

In a democracy, the differences are often irreconcilable and the idea of fully rational consensus is too tough a goal to reach. This instance showed how Federalism and globalization are leading to a movement of being away from single actor in decision making with a quest for balancing unity and diversity and calling for constant co-operation in policy making. The thrust of federal foreign affairs in India has been changing according to changing global conditions.

Innovation in negotiations and consultations are certain basic principles to be followed in the process of federal bargain. India is poised to become an economic superpower in the coming times. It is required to fine tune its national interest with that of states, thereby avoiding any unnecessary clash in articulation of ideas. The consensus achieved for negotiation was vertical amongst the executive branch, rather than horizontal. The multi-polar world needs a broad base decision making paradigm. The nation has to put forward a debate to act to correct this federal deficit in the decision making process.

[Amna Mirza is Ph. D Reserach Scholar, Department of Political Science, University of Delhi. She can be contacted at amnamirza2002@gmail.com]

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Posted by Indian Muslim Observer on December 22, 2011. Filed under , , . You can follow any responses to this entry through the RSS 2.0. Feel free to leave a response

By Indian Muslim Observer on December 22, 2011. Filed under , , . Follow any responses to the RSS 2.0. Leave a response

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