Parliamentary Affairs Minister Kamal Nath has assured that the UPA has the numbers to pass FDI in retail and said that the Opposition is largely in favour of passing other crucial reforms like the Insurance and Pension bills, albeit with some amendments.
Speaking to Karan Thapar on Devil's Advocate, Kamal Nath further said that the FEMA notification dealing with FDI in retail needed approval only in the Lok Sabha and not the Rajya Sabha.
Below is the transcript of the interview.
Karan Thapar: Hello and welcome to Devil's Advocate. Could FDI in retail trip up the government? That's the key issue I shall be discussing today with the Parliamentary Affairs Minister Kamal Nath. Mr Kamal Nath, let's start with the vote on FDI in retail in Parliament and the Lok Sabha first. Are you confident of winning in the Lower House?
Kamal Nath: I am confident because I believe political parties will understand that this is politics. Because what is the FDI in retail policy? We must understand this and not misunderstand it. It's a policy which enables the states to avail of FDI in retail if they so want.
Karan Thapar: In other words, the states have a veto. But let's not talk about what FDI in retail amounts to. Let's talk about how confident you are about winning in the Lok Sabha. Have you got credible assurances from the Samajwadi Party and the Bahujan Samaj Party that they will abstain because publicly, they have kept their cards very close to their chest.
Kamal Nath: Well, I have got assurances from nobody because we are still talking to everybody, making them understand. It is like saying that the Kerala state government, which is a Congress government, has said we won't want FDI in retail. Do you expect all the Kerala MPs to vote against FDI in retail?
Karan Thapar: Well, the Kerala Congress MPs are commanded by the Congress party whip so they will do what your leadership will tell them to do. The BSP and the SP don't come under your whip. So, when you say you got no assurances, are you saying in fact that you have no good reason to believe that they will abstain?
Kamal Nath: I have good reason to believe because I have good reason to believe that they are a responsible party they will understand the politics of it and they are not going to vote for the politics of the BJP.
Karan Thapar: In other words, you are relying on what you consider to be their good sense and the fact that they don't want to ally with the BJP. You don't actually have an assurance that they will abstain. You are just assuming this?
Kamal Nath: At this moment I have no assurance from anybody. All I know is that I believe and I am confident that we will be able to prevail upon political parties to understand what is behind this vote.
Karan Thapar: What about the Trinamool Congress, how do you believe that party will vote in the Lok Sabha?
Kamal Nath: I don't know, I am afraid I'm not the Trinamool Congress.
Karan Thapar: In which case if you have no assurances, you don't know how people will vote, you are only relying upon their good sense and the fact that you don't want, or don't think they would ally with the BJP, then you are really not confident about winning in the Lok Sabha at all.
Kamal Nath: I'm confident, I don't think you should really tell me what I should be confident about.
Karan Thapar: Let me put it differently, you have no good reasons to be confident about.
Kamal Nath: I have good reasons because I have good reasons to believe that they will understand the point we are making.
Karan Thapar: But it could equally go the other way around if they don't understand that?
Kamal Nath: 'If' can be anything, so let's not start a question with an if.
Karan Thapar: The truth is you are keeping your fingers crossed.
Kamal Nath: I keep my fingers crossed all the time because there is a fragmented polity, let's understand this, there is a fragmented polity. The BJP doesn't control Parliament anymore.
Karan Thapar: Because it is a fragmented polity and because in fact that it is desperate situation where many people will feel that elections suits them more than supporting the UPA government, it could go all wrong at that critical last moment.
Kamal Nath: I don't believe anything will going wrong. I'm confident; I have talked to them, and let's remember this we had our all-party meeting. In the all-party meeting three things emerged, number one, they said we want the House to run. Number two, they said we want to have a discussion. Number three, the majority of the members of Parliament said 'We don't care, we don't want a vote'.
Karan Thapar: That is different from saying 'We don't care what motion the debate is held under'. It is quite different that when it is held under the voting motion, they may vote against you, or they may deflect.
Kamal Nath: It reflects their understanding, the politics of it. If they wanted to vote against it, they would say 'let's have a vote'.
Karan Thapar: Let us then come to the Rajya Sabha, where Ram Gopal Yadav has said in crystal clear terms that the SP will vote against the FDI in retail. Do you have any reason to believe that between now and the vote in the Rajya Sabha, the SP will vote differently?
Kamal Nath: My reasons are simple that we are in talks with them. We are going to continue to be in talks with them until the vote. And I believe we will be able to convince them to understand the politics of it. Why? Because you must understand the FDI policy to understand the politics of it.
Karan Thapar: Once again you are hoping that when they understand the politics as you see it they will vote either with you, or they'll abstain but they won't vote against FDI.
Kamal Nath: I can't say what will happen. All I can say is that I'm confident. I'm confident that we are going to carry it through in the Lok Sabha and the Rajya Sabha.
Karan Thapar: Newspapers say that when it comes to the Rajya Sabha your party is hoping that the BSP won't just abstain, as you are hoping they would do in Lok Sabha, they might in the Rajya Sabha actually vote with you. Is that really a hope you have, or is that you are saying to...
Kamal Nath: That is what the newspapers are saying, that is not what I'm saying. I'm saying and I shall urge the political parties to not only abstain but to reject this politics.
Karan Thapar: Urge, no doubt you will, but how are you confident that they would respond the way you are urging?
Kamal Nath: I'm confident that they will understand it, and that they are sensible political parties. They understand the political dynamics, and once they understand it, they know what to do.
Karan Thapar: Let me put it like this, analysts say that the most difficult test of all is going to be in the Rajya Sabha. Analysts say that even if the SP, BSP and the TMC, all three, were to abstain in the Rajya Sabha, which analysts say is the best you can hope for, even then you will need every single one of the nominated members to vote with you, plus a handful of independents. Now that is pretty difficult to cater for?
Kamal Nath: Well, I'm confident of my numbers. For you to understand these numbers would be difficult. I'm confident of my numbers. I'm confident that we are going to take this through; the motion is going to be rejected in the Lok Sabha and in the Rajya Sabha.
Karan Thapar: You know, you say that you are confident that it is going to be rejected in the Rajya Sabha. What are you going to do about the fact that Sachin Tendulkar is going to prefer cricket rather than vote and Rekha may not turn up at all? That is two critical votes that you need.
Kamal Nath: I'm taking everything into account. I'm also taking into account that the other parties may not be there.
Karan Thapar: In other words are you arranging for abstentions carefully chosen from people in other parties who are slightly supporting you?
Kamal Nath: I'm not arranging abstentions of Sachin Tendulkar, I'm not arranging abstentions from any party. I have seen Parliament too long, I know how this works. And it is that what given me the confidence of what is going to happen.
Karan Thapar: The newspaper say that you have already established back channel talks with the JMM and BJD, have you had any reassuring response from either Shibu Soren or Naveen Patnaik.
Kamal Nath: I have had assurances from nobody. Let me say this, we are in talks with them, we are prevailing upon them to see the politics of it. And what they need to reject is the politics of it because the FDI policy is not what is in the debate.
Karan Thapar: You keep saying that you are hoping that when they understand the politics of it they would actually support you or at least tactically abstain. Let me put it like this Ram Gopal Yadav has said it in so many terms on TV, that the SP will vote against you in the Rajya Sabha. If they do there is a very good chance that you will lose in the Rajya Sabha, what then?
Kamal Nath: Let it happen. When I'm so confident why should it be what then? What if we are winning, what then?
Karan Thapar: No, you say let it happen, you could end up in a situation where you win the vote on FDI in retail in the Lok Sabha and lose it in the Rajya Sabha. In those circumstances will the government reconsider FDI in retail?
Kamal Nath: I don't believe. I am not giving that a thought. I'm not giving it a thought that we will win here and lose there, lose there and win here. I'm confident of winning in the Rajya Sabha. So, I don't go thinking beyond that.
Karan Thapar: And you are really and truly telling me that you are confident that you are going to win in the Rajya Sabha, when every analyst say that the stats are hugely against you.
Kamal Nath: I don't know about every analyst, I know about myself and I know that we will have the numbers.
Karan Thapar: Think or confident?
Kamal Nath: Obviously, think is confidence , otherwise I wouldn't think. And I believe that we are going to win, the motion will be rejected in Lok Sabha and Rajya Sabha.
Karan Thapar: A second problem that you face is that the rule change of FEMA without which in fact FDI in retail can't become a reality is again something that MPs can object to and force a vote upon. And if that vote happens unlike the vote after the debate, and you lose it, FDI in retail is scuffed.
Kamal Nath: Again if you lose it. Why don't you say if you win it? Now let me say this, they have to move an amendment, and there is no amendment as if now.
Karan Thapar: Absolutely but we are talking about Saturday, you only tabled the changes in the Lok Sabha on Friday. You haven't tabled them in the Rajya Sabha, so there is a lot of time. The papers say, not only one, but almost every paper says that the government is hoping that you can hold both votes together. The vote at the end of the debate, as well as the vote on the FEMA changes. But that can only happen if the Opposition cooperates with you. What likelihood is that will cooperate with you and permit you to hold both votes together?
Kamal Nath: This is for the presiding officers to decide, the Chairman of the Rajya Sabha, and the Speaker of the Lok Sabha, to decide the timing. The rules are very clear and they will take a decision on this.
Karan Thapar: No, in fact the truth is it won't be the presiding officers who will decide the timing of the vote on the FEMA changes because you are required to table the FEMA changes on the table of both the Houses for 30 days. And anytime during those 30 days period, any Opposition member can find fault or object which can force a vote which mean that the uncertainty over whether the rule changes will happen or not happen could continue into the Budget Session.
Kamal Nath:The rules are separate for Lok Sabha and Rajya Sabha. And let me say this, that when this is moved, if they don't move it. Well, let them move it, we will deal with it when they move it.
Karan Thapar: The question if they don't move it as it arrives, because I want to quote Sitaram Yechury to you, he says, "We will utilise all available options under the rules of business to ensure that this decision - FDI in retail - is not implemented. We will use all procedures to stall it." Clearly when you lay the rules on the table of the Rajya Sabha, he has 30 days thereafter to object to the changes, he may only object on the 29th. In which case you won't have clarity whether those changes are going to pass in the Rajya Sabha in the Budget session.
Kamal Nath: Okay, we will take it to the Budget session.
Karan Thapar: So, the uncertainly and the tension will continue for three months more.
Kamal Nath: If one House has passed it, it passes. It doesn't need both Houses to pass it.
Karan Thapar: You have taken the question out of my mouth. I was going to come to precisely there. Where do you get the confidence that you don't need both Houses to pass the rule, and that only one is sufficient?
Kamal Nath:That is what is prescribed in the rules.
Karan Thapar: Well, I'm afraid Sitaram Yechury says you are misunderstanding the rules. He says the very rule you are relying on to say one House passing is sufficient. He interprets to say that both Houses passing is necessary.
Kamal Nath: Well, I think this is not a matter for you and me to debate and discuss. This is the matter for the rules, for the Speaker, and the Chairman to decide.
Karan Thapar: In fact it could end up being a matter which goes to the court. Because if you believe it is passed with one House support, it could be challenged.
Kamal Nath: Anything can go to court, so when it goes to court we will deal with it.
Karan Thapar: Except for the fact that the impression being given, and if I can just see the impression, the message being sent out to investors who want to come in as FDI in retail investors is that this is a tricky business, this is a messy business, don't go to India. And in anyway it is not going to be cleared till the Budget Session, they won't come for three months more. And after that if it ends up in court they may not come at all.
Kamal Nath: All these countries are democracies, they have to go through it themselves. The free trade agreement with the US, two or three free trade agreements with US, didn't go through their Congress. It is a democracy, you don't say now US is finished, they are gone.
Karan Thapar: Except for the fact that the Prime Minister is using this as apart of a strategy to revive spirits and he said so in so many words. Far for reviving them if the confusion through the democratic procedure and then the fear that it going to a court to be challenged and knocked down is actually going to be the message to investors, they will not revive animal spirit, they will be depressed instead.
Kamal Nath: Let this happen let's not imagine this. We are imagining too much that this is going to happen and that is going to happen, then they are not going to come, and when they are not going to come all these other things are going to happen, why do we get into this?
Karan Thapar: You know the overall impression that is going out as a result of this interview to the viewers, who are listening intently, and beyond that to potential investors who are probably scrutinising your answers, the over all impression is when it comes to FDI in retail your government is skating on very thin ice and you don't know when it will crack and the water will swallow you up.
Kamal Nath: The FDI in retail comes with the approval of the states. In Parliament what are we going to discuss that whether the states should give their approval? What are we going to discuss in Parliament? What is the FDI policy?
Karan Thapar:You keep repeating the politics but the problem is that the numbers stand against you.
Kamal Nath: The investors also know that the states have to approve it. Do they or do they not know about it?
Karan Thapar:Of course they do. But before the states approve it, Parliament has to agree to the rule changes and if you get around it by believing that only one House is necessary and the Rajya Sabha can be ignored, you go to the court and if it goes to the court, the situation gets messy. And that's why I say that you are skating on thin ice.
Kamal Nath: I am not skating on thin ice at all. It is very clear. I know the rules and if there is any ambiguity in the rules, the Speaker or the Chairman will decide. And if it has to go to the court, fine.
Karan Thapar:My last question before I take a break. Do you really believe that this is a situation that gives you confidence, rather than a messy situation that probably worries people?
Kamal Nath: It's messy because of the Opposition, otherwise I am confident.
Karan Thapar:The problem is the Opposition almost has a veto power over you because they can bring down the changes you want and not let them happen. That's the problem, the numbers are not on your side.
Kamal Nath: I don't think so. I don't think anybody has a veto over us. Let's not be under this delusion.
Karan Thapar:Mr Kamal Nath, the truth is that FDI in retail might be a problem but it is not the only problem you have to handle as the Parliamentary Affairs Minister. You have to pass the Pension and the Insurance Bills and that could be much more difficult because you have no assurance from the BSP, while the TMC and the SP are adamant that they could be opposed to both.
Kamal Nath: We have talked to the Opposition party. I myself have spoken to the major Opposition parties. I spoke to them and they said that these five bills that are there, including the Insurance Bill, with some discussions and may be some amendments, all are acceptable to them.
Karan Thapar:I think you have put your finger on one way in which you might make them acceptable with amendments. Let me put two possible amendments to you - Are you prepared to lower the FDI level of permissibility of insurance from 49 to 26, to make the bill acceptable to the BJP?
Kamal Nath: The Standing Committee has given a report and the Finance Minister is examining this report. He is talking directly to the Opposition parties on all this. And it is the Opposition parties that told me that let's have a debate and move on with government business. Yes, there is one issue in the Insurance Bill and that is whether we should do what the Standing Committee is saying. Now, the Finance Minister is in conversation with them and as soon as they will have convergence, we will have the bill.
Karan Thapar:You are suggesting me that there is a possibility that the FDI limit in Pension Bill could come down?
Kamal Nath: I don't know. It is for the Finance Minister to decide.
Karan Thapar:You are not ruling it out.
Kamal Nath: I cannot rule it our or rule it in. This is for the Finance Minister to decide.
Karan Thapar:The second amendment that could help you this time with the Insurance Bill is if you limit the increase of foreign equity from 26 to 49 only to FIIs and not to the additional FDIs. The BJP might support it, are you ready to consider that?
Kamal Nath: The Finance Minister is talking to them and if it is acceptable to the Finance Minister and I am confident that is going to find convergence in this.
Karan Thapar:You keep saying if it is acceptable to the Finance Minister and you also say that he will find a convergence. Are you looking for a bit of more consultation, more dinner diplomacy with Mr Arun Jaitley, Sushma Swaraj? Is this how the ice will break?
Kamal Nath: It's not dinner diplomacy, it is engaging with them. We are going to continuously and extensively engage with all political parties.
Karan Thapar:Are you confident then that with a little bit of take and a little of give, you can bring the BJP around on these two critical issues?
Kamal Nath: Let's move forward. There are many things which happen milestone by milestone and I would look at it as long as we are moving forward, let's do it. Now it is for them to find convergence.
Karan Thapar:Suddenly you are now giving an impression and it is only an impression is that far from insurance and pension being difficult than FDI in retail here because the Finance Minister is looking at possible amendments and because you are confident that there would be convergence. Here you are suggesting that actually with a little bit of give and take, insurance and pension could pass may be not with 49 per cent in each case but with little amendments the bill could pass.
Kamal Nath: Of course I am because in my talks with the Opposition parties, they assured me that we want it to pass. We are going to discuss it with the Finance Minister, which they are doing, and we want to go ahead with it.
Karan Thapar: In which case will the vote on Pension and Insurance Bills happen in the Winter Session or is there a possibility that it could get postponed to the Budget Session?
Kamal Nath: I am hoping that all the five important bills of the Finance Ministry are passed in this session.
Karan Thapar: If you are correct and Insurance and Pension Bills pass, it will be a great boost to investors' sentiments while on the other hand if skeptics are correct and you stumbled over FDI in retail and Insurance and Pension Bills of course going to the Budget Session, that would damage the credibility of the government. You realise the credibility of the government is in your hands today?
Kamal Nath: Well of course Parliament must run and transact business and I as of now don't see any reason why we won't be able to pass all the five bills of the Finance Ministry this session.
Karan Thapar: In other words, the credibility of UPA II is safe in the hands of Kamal Nath?
Kamal Nath: Well, I hope so.
Karan Thapar: Kamal Nath, a pleasure talking to you.