NEW DELHI: Concern that slowing growth, a gloomy global outlook with Eurozone in crisis and the US economy still sluggish and graft scandals at home are souring the India story, saw Prime Minister Manmohan Singh turn to FDI in retail as a mood changer.

A recognition that urgent steps were needed to shore up the economy led Singh to deliver a blunt warning at the start of Parliament’s winter session: “As you all know, the global economy is facing serious difficulties and if we don’t manage our affairs well we can also go down.”

It was an uncharacteristic remark as India’s 8% plus growth rate has provided solace to a government in fire fighting mode since the first reports about corruption in the Commonwealth Games surfaced in mid-2010. It plainly indicated that the government was feeling the heat.

Allowing foreign investment in multi-brand retail has been tossed about in government for the last three years or so without anyone getting too serious about it. Even as inflation climbed and stubbornly refused to retreat, opening retail was spoken of but didn’t generate much traction.

But as a dark political and business environment bred a negativity that some see as a fallout of anti-corruption movements, middle India succumbing to a crisis of faith, infighting in government, proactive courts and a rampaging opposition — a fix was needed.

FDI in multi-brand retail may not be the sole pep pill the economy needs, but it was seen as a signal epitomizing a “now or never” moment to snap out of an inward spiral in a season of navel gazing. The PM felt sufficiently concerned by the approaching storm to bring FDI centrestage.

As the decision jammed Parliament and united opposition and key Congress allies, the PM was firm that a rollback would be a costly mistake. Government managers brushed aside the charge that the FDI decision could have been better timed. Singh, they said, acted in national interest. If he had waited till Parliament was over, he would have still attracted the charge of being canny.

While some see the sub-7% growth of the second quarter as a case of self-harm as much as a result of the developed world’s woes, opposition leaders blame the government’s profligate spending programmes and ineffective rate hikes.

Either way, conclusions are similar. And as government looks for a way out, its escape routes have been cut off by assertive allies like Trinamool Congress and DMK. Whether it is formally acknowledged or not, the FDI in retail is likely to be frozen for a while.