Can FDI in retail bring India’s government down?

Can Manmohan Singh's United Progressive Alliance government survive his efforts to push through economic reforms?

Parliament was shut down for the eighth day in a row Thursday as the Opposition and key allies of Singh's Congress party lobbied hard for a complete roll back of Singh's recent moves to allow 51% foreign ownership of multi-brand retail stores like Walmart, India's Hindu newspaper reported.

Afterward, Singh met with key alliance leaders to gauge their support ahead of a possible vote on the policy, which has been demanded by the Opposition.  To win, he'll need the votes of both the DMK and the Trinamool Congress.  But so far both parties have joined the Opposition in the clamor against liberalizing the rules on foreign investment — which opponents argue will squeeze out small traders and increase unemployment in the name of efficiency. 

According to NDTV, the DMK has to support the Congress in a vote if the Opposition succeeds in their call for an adjournment motion — which would give a thermometer reading on the prospects of a full-on vote of no confidence that would necessitate the dissolution of the government and early polls.

Officially, the Trinamool Congress has yet to decide what it will do, but NDTV quoted unnamed sources as saying some compromise is in the works under which the Trinamool Congress legislators to abstain from the vote in exchange from a sweetheart financial package for the party's home state of West Bengal.

If the DMK supports the government and Trinamool abstains, Singh would have the votes to push through the measure.

However, if it loses the support or tacit approval of either party, he would have to withdraw the move, which would send a powerful negative message to investors even as India's economic growth slowed to its lowest pace in two years during the latest financial quarter.

That would be a tremendous blow to Singh's "moral authority," as NDTV puts it.  But, like the tumult over corruption allegations earlier this year, it's unlikely to result in early polls.  Alliance partners like the DMK and Trinamool Congress have more invested in being in power than in their ideologies, and at least the DMK has as much reason to fear early polls as it does to look forward to them, as it was recently routed in state elections in its bailiwick of Tamil Nadu.