FDI in retail: Opposition motion defeated in Lok Sabha

With SP and BSP members staging a walk out, passing the motion for FDI in retail was a piece of cake for the UPA government

The United Progressive Alliance (UPA) government on Wednesday survived the attack from Opposition over foreign direct investment (FDI) in retail. The motion brought by the Opposition was defeated in the Lok Sabha. Out of total 471 members present in the House, 253 voted in favour while 218 opposed FDI in retail.

Members from both Samajwadi Party (SP) and Bahujan Samajwadi Party (BSP) both outside supporters of the government staged a walk out, thus reducing the numbers for the UPA government to win the motion.

Government has neglected the interest of farmers and small traders by deciding on FDI in multi-brand retail, SP chief Mulayam Singh Yadav alleged after his party's walkout.

"We walked out because the government has neglected the interest of farmers and small traders," he told reporters.

Asked why SP MPs walked out instead of voting against the motion, he said "this was the party's decision. The party has decided to stage walk out rejecting the move."

When it was pointed out that SP's decision has helped the government, he said "whatever the party has decided we do that exactly."

Expressing concern over the fate of farmers and small traders after FDI in retail, Yadav said the "interest of five crore small traders and 20 crore farmers and their families were sacrificed by the government's decision. That is why we have walked out."

Hours before the vote, the government sought to create a wedge among parties opposed to opening the retail sector to foreign companies, asking them to realise the politics of BJP.

"The question is not FDI as the decision to implement it is on the state governments. If the states have to decide, what are we deciding here. The only thing to be decided here is to support or oppose BJP's politics and condemn it," Parliamentary Affairs Minister Kamal Nath told reporters.

In reply to a poser on UPA's outside supporters SP and BSP opposing FDI in multi-brand retail, he said, "Speaking against FDI is a separate issue, because they can be against it. But I request all political parties to vote against the politics of will be demonstrated in the voting on Wednesday. They will be defeated today," he said.

Earlier, his deputy Rajiv Shukla said government was in touch with various parties for their support.

"We are in touch with all (parties). We have requested them to support us. FDI will not hurt the interests of farmers or small traders. In fact, it will help them," Shukla said.

While both SP and BSP had opposed FDI on Tuesday during a debate on the issue, they had not made it clear whether they will support the motion.

BJP leader Sushma Swaraj had asked the two parties to support the motion, saying their fears that the government could fall were "unfounded."




4 years ago

Coalition politics, in a situation where any political party in India growing into a size to muster single-party majority is very remote, is an unavoidable evil. But, any game should have pre-decided rules and changing rules mid-way should be avoided. To make things more transparent and credible, political leaderships at national and state levels should work out some formula which will ensure coalitions formed before any election from panchayat to parliament should remain in tact till the subsequent election. Once it breaks mid-term, mid-term elections within six months of such ‘break’ alone should be the alternative before political leadership. But, who wants stability, continuity or a transparent conduct of ‘political business’ or ‘business of politics’ which happens to be the prerogative of certain families across the nation? In this case, what happened is, representatives of majority members of parliament spoke against FDI in retail in the form UPA II wants to introduce it and their views did not transform into votes!


4 years ago


UP politicians are the bane of India.

Government transfers land for Dr Ambedkar memorial in Mumbai, Mayawati unimpressed

Meeting a long pending demand of several supporters of Babasaheb Ambedkar, the union government announced transfer of prime Indu Mill land in Mumbai to Maharashtra for constructing a memorial


New Delhi: The Union Government on Wednesday transferred a piece of prime land in Mumbai for a memorial to Dr Babasaheb Ambedkar ahead of the crucial vote on foreign direct investment (FDI) in Parliament but BSP Chief Mayawati appeared unimpressed seeking at least 30-40 acres of land for the purpose, reports PTI.

"If the government allocates 12-13 acres of land for it, it would not be sufficient for the memorial. For such a grand memorial for Dr Ambedkar, at least 30-40 acres of land would be required. In 12-13 acres, no grand memorial can be built," she told reporters outside Parliament House.

"We will not accept if the government makes a memorial for Dr Ambedkar in 12-13 acres of land. He will have to be given his due respect as he is the father of our Constitution," she said.

Earlier, the government announced in both Houses of Parliament transfer of prime Indu Mill land in Mumbai to Maharashtra government for constructing a memorial to Dr Ambedkar, meeting a long pending demand of several political parties in the state.

Reports had it that the total land of the now defunct Indu Mill near Chaityabhumi at Dadar in Mumbai, was of 12.5 acres.

Mayawati raised the issue in a big way in Rajya Sabha.

Even though Chairman Hamid Ansari said a statement by the government is listed in the agenda and the announcement will be made at noon, she insisted that the Question Hour be suspended and the statement be made forthwith leading to the adjournment of the House.

When the House reassembled and Minister of State for Parliamentary Affairs Rajiv Shukla announced the decision to transfer land, Mayawati asked the details of the memorial plan seeking to know how much money would be spent on it and how much land would be allocated for the purpose.

Making the announcement in Lok Sabha, Textile Minister Anand Sharma said, "The Government of India has taken a view to make available this land for use to the Government of Maharashtra for the construction of a befitting memorial."

The ashes of Babasaheb Ambedkar are interred at Chaitya Bhoomi, situated in the vicinity of the 12.5 acre land of India United Mill, popularly known as Indu Mill, under the National Textile Corporation at Prabhadevi in central Mumbai.

"The government has initiated the process to give effect to this decision and I will be shortly be moving the necessary legislative proposal for Parliamentary approval. I seek the support and endorsement of the House," Sharma said.

The announcement came at a time when the government, which does not have numbers in the Upper House, is banking heavily on BSP for a smooth sail during voting on the FDI issue.

In Rajya Sabha, Shukla promised "whatever explanation they (BSP) are seeking will be made available."

BJP's Ravishankar Prasad also supported Mayawati's demand.



REC’s tax-free bonds are struggling to entice investors

REC bonds, offering 7.88% tax-free, are yet to attract retail investors. Either the investors have not warmed up to the first in the series of tax free bonds issues or they don’t find it as attractive as last year

Rural Electrification Corporation (REC) has launched its public issue of secured, tax-free bonds at an interest rate range of 7.22%-7.88% per annum (p.a.) for 10 and 15 year terms for retail investors. Non-retail investors will get 0.5% p.a. less. Both retail and non-retail categories are struggling to entice investors.


The issue has opened on 3rd December and will close on 10th December. Here are the subscription details at the end of second day (4th  December)



Subscription (in crores)

Issue reserved (in crores)

Category-1 (Qualified Institutional Investors) – 30%



Category-2 (Non Institutional Investors) – 15%



Category-3 (High Net Worth Individuals) – 15%



Category-4 (Retail Investors) – 40%



Individual investment up to Rs10 lakh will be considered as retail application


Last fiscal, REC raised Rs3,000 crore through the public issue of tax-free bonds with coupon rate of 8.13%-8.32% for 10 and 15 years term respectively. The success of last year does not seem to be working so far.


The interest from these bonds is tax-free to investors. Today, it is difficult to get more than 9%p.a for long-term fixed deposits (FDs) from banks. Those earning more than Rs10 lakh annually are in the highest tax bracket (30%). This means that effective post-tax return from long-term FDs is only 6.3%. AAA rated tax-free bonds giving 7.88% is much better option. Yet, the interest is subdued as compared to last year. It could be that investors have not warmed up to the first in the series of tax-free bonds issues or they don’t find it as much attractive as last year. The coupon for this year has not broken the psychological barrier of 8% tax free.


According to one financial planner, “70% of the investment so far has come from Mumbai, Ahmedabad and to some extent from Hyderabad. Other cities have not woken up for subscribing to tax-free bonds. Till today morning (5 December) retail participation is only Rs625 crore. It is uncertain how the bond issues that will come till March 2013 fare.”


This first tranche for REC issue aggregates Rs.1,000 crore with the option to retain oversubscription up to Rs.4,500 crore. REC is allowed to raise Rs5,000 crore through redeemable non-convertible tax-free bonds. It has so far raised Rs500 crore through private placement.


REC offering is as follows -



10 year REC bond

15 year REC bond

Face value



Minimum application

5 bonds (Rs5,000)

5 bonds (Rs5,000)

Interest coupon for RII



Interest coupon for others



Interest payment option



Credit rating

AAA by Crisil, CARE, Icra

AAA by Crisil, CARE, Icra

Demat and Physical

Both options available

Both options available

Bonds will be listed on BSE and NSE


Government companies are coming out with Rs53,500 crore worth of tax-free bond issues as compared to Rs30,000 crore last fiscal. Only time will tell how successful they will be.


10 companies authorised to issue tax-free bonds this fiscal:  


Name of Company

Bond Issue Size in Rs crore

NHAI (National Highways Authority of India)


IRFC (Indian Railway Finance Corporation)


IIFCL (India Infrastructure Finance Company)


HUDCO (Housing and Urban Development Corporation)


NHB (National Housing Bank)


PFC (Power Finance Corporation)


REC (Rural Electrification Corporation)


Jawaharlal Nehru Port Trust


Ennore Port


Dredging Corporation of India






4 years ago

The analysis above seems a bit off mark in terms that the issue is actually for 1000Cr with option to retain upton 4500Cr. As far as the offer is concerned the issue (i.e 1000Cr)was oversubscribed by 1.04 times the first day itself (in retail category). The subscription data on NSE currently (end of Dec 5) reads as 1.75 times in retail, 1.71 times in HNI, .61 times in corporates and .06 times in category 1 (and historically the Category 1 and 2 gets subscription only on last day)... so I expect this issue to be a success (if not 4500 Cr it shall surely cross 3000 Cr)



In Reply to Sajal 4 years ago

The first tranche for REC issue aggregates Rs1,000 crore with the option to retain oversubscription up to Rs4,500 crore. REC has been approved for Rs5,000 crores out of which they have done private placement for Rs500 crores.

BSE/NSE data we have received is with respect to Rs4,500 crores and not Rs1,000 crores. REC would rather get Rs4,500 crores now instead of just Rs1,000 crores to avoid issuing future tranches.

We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)