Commerce Ministry distances itself from Wal-Mart-Bharti controversy

Phnom Phen, Cambodia: The question marks over the nature and manner of an investment in Bharti Retail by the world’s largest retailer Wal-Mart will now be answered by the Enforcement Directorate (ED) even as the Commerce and Industry Ministry has distanced itself from the controversy.

In response to a question on the allegations against Wal-Mart and the ongoing ED probe, Commerce Minister Anand Sharma, who is accompanying Prime Minister Manmohan Singh to the 10th India-Asean Summit, said that “no violations would have taken place once the pause button on FDI in multi-brand retail was lifted this September”.

While Sharma did not comment on the ED probe, he did say that the “authorities will have the freedom to investigate the matter”.

Sharma’s comment is the second by a Cabinet Minister on the matter and comes a couple of days after Finance Minister P Chidambaram said the government was awaiting the probe report.

The controversy over the Wal-Mart investment in its Indian partner Bharti Retail, reported first by CNBC TV18 this October, threatens to compound the government’s woes in Parliament, which convenes for its winter session early next week.

The opposition parties have already sought a formal discussion the retail FDI policy and have also served notice that the matter be voted upon. A decision on whether the debate, which the government is willing to concede, will be followed by a vote is up to the Lok Sabha Speaker Meira Kumar.

However, Sharma does not believe that the policy decision requires legislative approval and is clear that there can be no rollback at all.

“This is a policy cast in stone. We cannot allow ideological opposition to vet policy decisions,” he said.

The comments make it clear that the government will not cede any ground on the matter of allowing foreign retailers to invest directly in Indian companies and are a pointer to the UPA’s likely strategy in Parliament.

“This is a decision which is in the executive domain. It does not require legislative approval. There is no history of executive decisions being dragged to Parliament,” Sharma added.

The comment underscores the strong likelihood that the ruling coalition will oppose any voting on the matter during the Parliament debate and will stick to its guns on the matter.

That would therefore imply that Parliament could get stalled again over the issue of a debate sans a formal vote, as the Opposition will press ahead with its claims and could even move a no-confidence motion.

Parliamentary rules allow one such motion every six months. But, Sharma believes that the government is under no threat. “The government is confident of commanding a majority in Parliament and facing any challenge,” he claimed.