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Govt issued 3 Fema amendments for multi-brand FDI, says attorney general

Source : BUSINESS_STANDARD
Last Updated: Mon, Nov 05, 2012 19:13 hrs

Attorney General G E Vahanvati on Monday told the Supreme Court the Centre had notified three amendments to the Foreign Exchange Management Act (Fema) rules to enable foreign direct investment (FDI) into the multi-brand retail sector.

Vahanvati was replying to a notice issued in a public interest suit that alleged the government had allowed 51 per cent FDI into the multi-brand retail sector without framing rules and regulations and without the assent of both Houses of Parliament. The petition, moved by Supreme Court lawyer Manohar Lal Sharma, was taken up on October 1.

Vahanvati said the three amendments had been notified on October 30, enabling the government to allow FDI into the multi-brand retail sector. The changes were made to the Fema (Transfer of Security by a Person Resident Outside India) Regulations 2012.

Sharma, however, said these amendments had to be approved by both Houses of Parliament and mere assurance to the court that the amendments had been made wasn’t enough to make the process constitutional. He added similar amendments to the Sebi (Securities and Exchange Board of India) Rules 1992 had also been made, but so far, these hadn’t been presented before the Houses. He said though the amendments hadn’t been approved by Parliament, the government had already granted 50 licences. If the government gave licences hoping Parliament would approve the amendments, the process would become too difficult to be reversed, he added.

The judges, however, said mere apprehensions couldn’t be the basis of passing orders. They asked Sharma to wait and watch the next session of Parliament, scheduled to begin on November 23. If the Houses passed the amendments, there would be no cause for any grievance. Therefore, the court adjourned the hearing till January 22.Also, the court did not permit intervention by two organisations, which wanted to challenge the economic policy of the government on the issue of FDI. The judges added the court would not interfere with government policies.




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