Trinamool Congress quits India coalition over retail reforms
September 19 , 2012
A key regional party has pulled out of India's ruling coalition over plans to open the country’s lucrative retail sector to global supermarket chains.
On Tuesday, the Trinamool Congress (TMC) party, headed by West Bengal Chief Minister Mamata Banerjee, announced that its six ministers would resign from the Congress party-led coalition on Friday.
Banerjee said her 19 MPs would not support the coalition in parliament.
Despite losing the backing of the TMC, the government’s parliamentary majority is not at risk.
The central government still has the support of more than 300 MPs and needs 272 to stay in power.
However, the TMC’s withdrawal could force it to succumb to the demands of its other allies, most of which strongly oppose foreign investment in the retail sector.
The move, announced on Friday, is aimed to boost the country’s waning economy.
International firms such as Walmart and Tesco will now be able to buy up to a 51 percent stake in multi-brand retailers. However, small shops fear they will be put out of business.
Last year, the government suspended a similar plan following opposition from its allies and political rivals.
The government also announced on Friday it would allow foreign airlines to buy a 49 percent stake in local carriers, sell minority stakes in four state-run companies and increase the price of diesel.
The reforms have drawn fierce criticism from across the political spectrum.