* FDI will cause unemployment-opposition veteran
* Opposition to policy shows no sign of easing
* Policy seen key to continued economic growth
By Henry Foy
MUMBAI, Dec 3 India's government is
fooling the country about the benefits of foreign supermarkets,
an opposition leader said on Saturday, bolstering resistance to
the reform agenda of beleaguered Prime Minister Manmohan Singh.
A decision to allow global giants such as Wal-Mart
into India's $450 billion retail market, the first major
economic reform since Singh's graft-riddled term began in 2009,
has been met with fierce opposition from parties who say it will
destroy the livelihoods of millions of small traders.
"Wal-Mart may be fine for (the West) but Wal-Mart does not
serve us," L.K. Advani, a 78-year-old leader of the Bharatiya
Janata Party (BJP), said on Saturday.
"We should not be envious of Wal-Mart," Advani, a former
president of the BJP and leader of the opposition from 2004 to
2009, told a summit in New Delhi, warning against a desire to be
"envious" of western economies.
The BJP's opposition to the policy stands in stark contrast
to its free-market stance and is the latest move by an
increasingly populist opposition that has sought to portray the
ruling Congress party as out of touch with common Indians as
elections loom in 2014.
Allowing foreign direct investment (FDI) into the retail
industry is one of a basket of reforms seen as key to sustaining
India's continued growth that have been postponed over the past
18 months as the government reeled from scandal to scandal.
The controversy has drawn on some deep-seated nationalism in
the right-wing opposition party, which appeared to support the
policy in 2004 but has now jumped to the support of millions of
small shopkeepers that they see as a key vote base.
The BJP has led protests in parliament that have paralysed
both chambers every day since the 21-day winter session opened
"To give an impression that FDI in retail will solve all
problems like inflation, price rise, unemployment... whosoever
is saying this is fooling people that FDI will get millions of
jobs. It cannot happen," Advani said.
"I see no reason why the government decided on FDI in retail
knowing full well that a large section of people will get
affected," added the veteran politician, whom some have tipped
as a potential prime ministerial candidate in 2014.
Singh this week rejected calls to roll back the policy amid
media reports that some of his coalition partners were thinking
of adding their voice to the opposition.
With a thin parliamentary majority, the government is
dependent on allies but does not face any immediate threat of
Singh is unlikely to agree to rescinding the policy given
that it could damage India's image with foreign investors as
Asia's third-largest economy shows signs of slowing.
"Local retailers have been content thinking small and doing
little. It's time to change that mindset by opening up to FDI in
retail," wrote the Economic Times in an editorial on Saturday.
The reform would allow global chains like Wal-Mart, Tesco
Plc and Carrefour to own up to 51 percent of
retail ventures and allow foreign firms to fully own
single-brand retail operations.
Congress ministers have strongly defended the decision,
saying that it will create millions of jobs, improve creaking
supply-chain infrastructure and bring down stubbornly high
inflation which is crimping economic growth.
The controversy comes as the party fights to fend off
accusations of corruption and a failure to tackle high prices
before state elections due next year.