New Delhi: The government on Monday found itself in a tight corner on the issue of FDI in retail with allies Trinamool Congress and DMK joining the Opposition in demanding withdrawal of the decision paralysing Parliament and an all party meeting has been called on Tuesday to break the logjam.

DMK, which joined the Trinamool Congress in opposing the decision, described as "dangerous" allowing FDI in retail trade alleging it will affect lakhs of small traders as well as the poor and middle class consumers.

The two allies with 18 MPs each constitute the largest groups after Congress, which heads the UPA coalition, and have demanded a roll back of the decision immediately.

With the Opposition displaying rare unity against the decision to allow 51 percent foreign direct investment in multi-brand retail, Leader of the Lok Sabha and Finance Minister Pranab Mukherjee will meet floor leaders of political parties in a bid to break the deadlock.

Prime Minister Manmohan Singh, who met Congress President Sonia Gandhi in the noon, held parleys with senior ministers Mukherjee, P Chidambaram, A K Antony and Commerce Minister Anand Sharma in the evening on the strategy the government will adopt on Tuesday.

There was speculation whether government would at least put on hold the FDI decision in the interest of functioning of the Parliament.

But Parliamentary Affairs Minister P K Bansal said the government is convinced that the FDI decision was in the larger national interest and would benefit every section of society.

Tuesday's meeting has been convened as an effort to talk to the Opposition to ensure that the Parliament, which has been paralysed for five days, functioned.

On his part Sharma sought to reach out to Opposition parties by writing a letter to them and appealed to them to rise above "petty partisanship" on the issue.

The entire Opposition, barring BJP ally Akali Dal, put the blame on the government for the Parliament's disruption saying they were not consulted on such a vital issue. The unity among the Opposition has also surprised the government.

Notices of adjournment motion on the issue were tabled by leaders of several parties in the Lok Sabha which are under the consideration of Speaker Meira Kumar.  Similar notices were also tabled in the Rajya Sabha.

"Scrap the decision by the night.  Parliament can function tomorrow," Leader of the Opposition Sushma Swaraj told a press conference.

JD(U) leader Sharad Yadav said the Congress took the FDI deliberately to sabotage the Parliament at a time when it was scheduled to discuss crucial issues like price rise and black money.

Yadav, who is NDA convener and BJP spokesperson Shahnawaz Hussain, said the question of allowing the Parliament to function does not arise till government reverses the decision.

The Opposition has said that the decision would sound the death knell for millions of small traders and cause huge unemployment in the rural areas. The FDI decision has also met with stiff resistance from Chief Ministers of non-Congress states like Uttar Pradesh, Tamil Nadu, Bihar, Orissa and those ruled by BJP.

West Bengal Chief Minister and TC leader Mamata Banerjee has already said the decision would not be implemented in the state.

DMK President Karunanidhi said the Centre's insistence that states should implement the decision was not justified.

Kerala PCC President Ramesh Chennithala has written to the Prime Minister expressing his opposition to the decision and wanted that it should not be implemented in the state.

Meanwhile, Tuesday’s meeting has been convened as an effort to talk to the Opposition to ensure that the Parliament, which has been paralysed for five days, functioned.

Several states raise concerns

Several states, including Congress-ruled Haryana, have expressed concern over the possible impact of allowing foreign investment in retail and questioned the claims of the Centre that it would generate more jobs.

While the NDA-ruled Bihar and Gujarat are opposed to permitting FDI in retail, Haryana and West Bengal said the decision will impact small traders.

"As far as retail sector is concerned there are lot of people like small traders who naturally in the long term will be affected... but to what extent that we have not studied," Haryana Finance Minister Kiran Choudhry told reporters here.

Echoing views, Gujarat Finance Minister Saurabh Patel said, "We see a lot of unemployment (being) created in the retail sector and for a lot of small scale manufacturer it will be harmful."

Congress in Kerala has also been opposing FDI in retail fearing that the opposition Left would capitalise on it by weaning away small and marginal retail shop owners from its supporters.

Last week, the Cabinet had approved 51 percent FDI in multi-brand retail and 100 percent in single brand, thereby allowing foreign players like Tesco and Walmart to open shops here.

"We have no evidence to support that it will be beneficial to small traders," West Bengal Finance Minister Amit Mitra said.

Bihar Finance Minister Sushil Modi said, "I never said we welcome Walmart (in Bihar). We feel that Organisation like Walmart and Tesco are not required in Bihar as it will hamper
many small traders."

The parties and alliances ruling in 11 major states have strongly opposed the decision of the Central government to allow foreign direct investment (FDI) in multi-brand retail which is dominated by small traders.

According to 2011 Census, there are 28 cities in 11 states ruled by the parties opposed to the decision. These include big cities like Bangalore, Kolkata, Ahmedabad, Patna, Allahabad and Bhopal which have over one million population, the threshold set by Cabinet while approving FDI in retail on November 24.

Excluding Punjab, BJP and NDA rule in eight states, including Madhya Pradesh, Gujarat, Karnataka, Chattisgarh, Chennai, Coimbatore, Jharkhand, Uttarakhand, Bihar and Himachal Pradesh. BJP indicated that states where the party is in power may not permit foreign stores.

Besides, Uttar Pradesh Chief Minister Mayawati has already stated that no foreign retailers would be allowed in her state.

The final authority for granting the trade licence rests with the states under their respective shops and establishment Acts.