Wednesday, 5 December 2012

BSP, SP bail out UPA; Lok Sabha nod for FDI in retail

The Mayawati-led Bahujan Samajwadi Party (BSP) and the Mulayam Singh led-Samajwadi Party (SP) today bailed out the ruling UPA government as they staged a walkout in the Lok Sabhathus abstaining from voting on the critical FDI in retail issue. 

The government managed to defeat the BJP's motion against FDI in retail by getting 253 votes, while those opposed to FDI got 218 votes.

The motion opposing the decision was moved by the BJP and the CPI-M.

The walkout brought down the House strength to 502 and the halfway mark required to win the vote fell to 251.

In a House of 544 members, 43 members (SP 22, BSP 21) walked out of Lok Sabha bringing down the strength to 501.

Of the 501 members in the House, only 471 voted on the FDI issue.

The victory gives Manmohan Singh a much-needed boost at a time when he is trying to drive a second wave of economic reforms through a fractious parliament. The debate over retail reform has proved a costly distraction for the government and has already eaten up two weeks of the month-long parliamentary session.

The vote now clears the way for voting on bills aimed at attracting foreign investment to the ailing pension and insurance industries, two measures seen by financial markets as important steps towards further liberalising an economy in the midst of a slowdown.

The vote in the Lok Sabha - which the government won thanks to abstentions by two powerful regional parties - was non-binding. However, a loss would have made it harder for Singh to defend the policy to bring global chains such as Wal-Mart Stores Inc. to India's $450 billion retail sector.

Government wins vote on FEMA amendments

The Trinamool Congress's motion on FEMA amendments to facilitate foreign investment in multi-brand retail too was defeated in the Lok Sabha by the UPA.

For: 224, Against: 254. 

FEMA amendments are a prerequisite for the FDI policy to come into force.

Trinamool Congress MP Saugata Roy had moved the motion opposing the amendments.

The issue of foreign investment in retail was furiously debated in the Lok Sabha on Tuesday and Wednesday with the Opposition lashing out at the move as the government, confident of its numbers, appealed to all parties to vote in its favour. All the while, the focus remained on which way theSamajwadi Party (SP) and Bahujan Samaj Party (BSP) would vote.

This is how numbers stacked up at the time of the vote:

For FDI: Congress: 201, DMK: 18, RJD: 4, NCP: 9, Others: 21 = 253

Against FDI: NDA: 152, Left: 24, TMC: 19, ADMK: 9, BJD: 14 = 218

How the voting took place

The procedure followed for the voting on FDI in multi-brand retail in the Lok Sabha is as follows:

Every MP's seat had four buttons. These were For, Against, Abstain and Present.

When the bell rang to begin voting, each Member of Parliament first pressed the 'Present' button, and then pressed the button on the basis of his/her choice from the other three remaining buttons: For, Against, or Abstain.

The button needed to be kept pressed for at least 10 seconds till another bell was sounded. If the MP made a mistake he/she could rectify it by again pressing the right button, but this had to be done before the second bell rings.

The result then showed up on each seat.

Under threat of losing India's investment grade credit rating, and facing the prospect of fighting a general election during the worst growth slump in a decade, Singh launched the policy amid a flurry of long-delayed reforms in September.

Money has flowed into India's capital markets since, and Goldman Sachs last week upgraded India's outlook, but formidable hurdles remain to get the economy back on track.

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