Indian retail reforms face parliament debate

NEW DELHI: The Indian government on Tuesday braced itself for a test of strength as parliament debated reforms ahead of a vote on allowing in foreign supermarkets, a policy that has revitalised opposition parties.

The Congress-led government believes it has the numbers to win a vote in the lower house expected on Wednesday, and hopes that victory will enable it to push ahead with further reforms to tackle the slowing economy.

Parliament was deadlocked for days during the current winter session as opposition lawmakers held noisy protests demanding a vote on the retail policy. The government conceded even though the reform requires only cabinet approval and has already been declared law.

Supporters of the arrival of chains such as Walmart, Tesco and Carrefour say it could revolutionise shopping in India, with consumers shifting to large supermarkets, and improve India's antiquated food-supply chain.

But the decision has been attacked by the opposition as a sellout to foreigners that will force family-owned stores, which currently dominate India's retail landscape, to shut.

The Congress-led coalition lost its majority in September when a regional ally exited the government over the policy.

Although the non-binding vote will not affect the government's ability to enact the policy, Prime Minister Manmohan Singh would suffer a major public setback if it fails to win enough support from lawmakers.

Indian media on Tuesday reported that Congress should win the vote in the lower house, but would rely on support from regional parties to win a vote in the upper house expected on Friday.

"We are confident of the numbers," parliamentary affairs minister Kamal Nath told reporters. "I urge all parties to reject the politics of it and vote against the politics in the house."

Singh's push for pro-market reforms comes as the government faces a sharply slowing economy, a gaping fiscal deficit and high inflation, which has stoked pressure on the left-leaning alliance.

The media has dubbed the reforms push a second "big bang" following Singh's efforts when he was finance minister to begin opening India's economy to the world two decades ago.

While the retail decision did not require a parliamentary vote to become law, the government's other proposals to open up the insurance and pensions markets to wider foreign investment will need lawmakers' approval.

- AFP/de

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