The Centre's grand plans of opening up foreign direct investment (FDI) in multi-brand retail can be derailed by State Governments opposed to the move.
The Government has admitted as much, after West Bengal, Bihar and Uttar Pradesh announced their opposition.
“Any State can block the permission,” admitted the Commerce and Industry Minister, Mr Anand Sharma. A retailer wanting to set up shop will require a licence under the Shops and Establishment Act, which falls under the purview of State Governments.
The Centre has prescribed rules for the foreign direct investment in retail trade under its powers given in the concurrent list. Foreign retailers need to first submit their proposal to the Centre, and then knock on the doors of the States, not just for licences, but also for land, water and electricity besides others.
Mr Sharma, meanwhile, said a progressive State would like to have FDI in retail. “You need to be progressive in thinking, not sectoral,” the Minister quipped.
Talking about the opposition from ally the Trinamool Congress (TMC), Mr Sharma said that if needed, he is prepared to talk again to Ms Mamata Banerjee. Both leaders had detailed discussions on Thursday. It is believed that TMC leader and the Railway Minister, Mr Dinesh Trivedi, had complained during the Cabinet meeting that his leader was not consulted.
The ruling UPA's alliance partner DMK is also opposing FDI in retail. Its leader and the Chemical and Fertiliser Minister, Mr M.K. Alagiri, is also believed to have protested during Thursday's Cabinet meeting.
In the mean time, both houses of Parliament witnessed uproar on the Cabinet decision. TMC members joined the Opposition and trooped into the Well of the House shouting slogans against the decision.
In the Rajya Sabha, Mr Sharma's statement giving details of the decision was torn into pieces by CPI (M) and BJP members.
In the din, Mr Sharma could not complete his statement and both the Houses were adjourned till Monday.