Is FDI in retail in India a gimmick, asks SC

New Delhi: The Supreme Court on Tuesday said it would test the constitutional validity of the government's decision to allow foreign direct investment in multi-brand retail and asked the UPA government to spell out the safeguards put in place to protect small traders from possible onslaught of multinationals in future. 

    Parliament's approval of the policy decision was cited by attorney general G E Vahanvati to clinch the issue before a bench of Justices R M Lodha and S J Mukhopadhaya, which was hearing a PIL filed by advocate M L Sharma alleging that permitting FDI in retail was in breach of FEMA regulations. 
    The bench asked whether the government has received FDI proposals since Parliament approved the policy decision. "It is now six-seven weeks since Parliament approved the decision. Now the policy is in place. What has happened since then? Have you received some investment or was it just a political gimmick?" it said. SC: Legal validity of FDI is in question 
New Delhi: The SC on Tuesday made some terse comments about the Centre's decision to allow FDI in multibrand retail. Taken aback, attorney general G E Vahanvati said receiving FDI in retail will take some time as it was a part of series of reforms that would slowly transform the country's investment scenario to make it lucrative enough for the foreign investors. 
    More importantly, Vahanvati said, it would be beneficial for consumers and small traders. 
    Vahanvati stuck to his argument that it was a policy decision approved by Parliament after a detailed debate and hence the courts could not go into the necessity of such a move. However, the bench said, "It is a policy decision alright but its legal validity is challenged. The government must satisfy the court on this count... We want to know what steps had been taken by the government to alleviate these fears." 
    Vahanvati said these were the concerns Parliament debated before approving the decision. The bench was, however, firm on examining the decision not only from small traders' point of view but also from all angles. 
    It asked the government to file an affidavit in three weeks giving a detailed response. 
    To explain its mind, the bench gave an illustration on elimination of competition by big players. It said, "Once the big players come in, they artificially so bring down the price that the small traders fail to match the price tag and are forced to shut shop. Once the competition is eliminated in this process, the big players jack up the price leaving the consumer no option but to pay." 
    Vahanvati said there was adequate legal framework to protect small traders from unfair means meant to kill competition and pointed out the setting up of the Competition Commission. But, the bench asked, "How many small traders can move the forum?" 
    On October 16, the court had said the permission to allow FDI in multibrand retail appeared to be at variance with the FEMA regulations. Two weeks later, RBI amended the regulations and the amendments were approved by Parliame