NEW DELHI: The ruling UPA government got a much-needed boost as it won the vote in the Rajya Sabha on foreign direct investment (FDI) in retail, paving the way for Prime Minister Manmohan Singh to press ahead with more reforms, including freeing up a cash-strapped insurance sector.
Getting support once again from the unlikely combination of Mulayam Singh Yadav's Samajwadi Party (SP) and Mayawati's Bahujan Samaj Party (BSP), the government won the day in the Rajya Sabha by 14 votes.
In the house, the opposition-backed motion got 109 votes and the government 123 votes. One member, cricketer Sachin Tendulkar, was away playing a match against England in Kolkata.
While the Rajya Sabha vote was symbolic, the government's victory is a boost for its push to implement a controversial economic reform agenda that is seen as crucial to reviving growth and reducing a bloated fiscal deficit.
Minutes before the voting process began, the SP walked out of the house with its nine MPs, bailing out the ruling United Progressive Alliance (UPA) -- as it had Wednesday when the Lok Sabha voted on the issue.
On Thursday, day one of the debate on the issue in the Rajya Sabha, Mayawati had said in the house that 15 MPs from her party would be voting with the government.
Both the BSP and SP support the government from outside.
The government had already won a vote on retail reform in the Lok Sabha two days earlier. The policy will allow global retailers such as Wal-Mart Stores Inc to set up shop in the country's $450 billion retail sector, and is aimed at drawing more overseas investment and taming inflation.
Although both votes were non-binding, defeat would have piled pressure on Singh to roll back the measure.
Moreover, the main opposition Bharatiya Janata Party (BJP), having seen its motion to block retail reform defeated, is likely to obstruct moves to allow foreign direct investment (FDI) in the insurance sector. The BJP wants a 26 percent cap set on investment, against the government's proposed 49 percent.
"We will oppose any move by the government against the recommendations of the standing committee on finance which has said it should be 26 percent," Prakash Javdekar, a BJP leader and spokesman for the party, told Reuters on Friday.
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.
India's economy is set to grow at its slowest pace in a decade in this fiscal year, and the government's overspend on subsidies on fuel and food has prompted global ratings agencies to warn of a downgrade.
FDI win is rejection of politics of BJP: Kamal Nath
The government Friday termed its winning of the FDI vote in the Rajya Sabha as a "rejection of the politics of the BJP".
"It is a rejection of the politics of the BJP (Bharatiya Janata Party), I wish they were better losers," Parliamentary Affairs Minister Kamal Nath told reporters outside Parliament House minutes after the United Progressive Alliance (UPA) government won the vote in the upper house.
Asked how the Congress managed to work the numbers in its favour in the upper house where it is in a minority, Kamal Nath said: "The content (of the issue) was political political parties decided in our favour."
"I appealed to parties to recognise the BJP's political agenda and vote accordingly, and they did that," he added.
'Next government will reverse FDI decision'
The AIADMK gave a "solemn assurance" to reverse the decision to allow foreign direct investment (FDI) in multi-brand retail after the next Lok Sabha elections.
AIADMK leader V. Maitreyan, who moved the motion for a debate on FDI in the Rajya Sabha, said the final vote will be cast by the people in the next election.
"I give a solemn assurance that after the next Lok Sabha elections, the next government will reverse the decision of the UPA, and I stand by this assurance that FDI will only be on paper and will not be implemented in states.
"From now onwards we will see that the debate goes on across the length and breadth of the country and the final vote will be cast by the people at the next Lok Sabha elections," he added.
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