FDI in Multi-brand Retail

Can the Government Explain its Unseemly, Illegal Hurry?

And Can it Stop Cheating on Rule 235?

1. In the past few days, there has been a debate in Parliament, in the media and in the public sphere about whether the discussion on FDI in multi-brand retail should be conducted under rule 193 (a short-duration discussion with no voting) or rule 184 (with voting) of the Lok Sabha rules. The government says it has finally agreed to a discussion under rule 184 and agreed to a vote. It pretends it has done the opposition, the country and the world a favour.

2. Typical of the conduct of the UPA government, the spokespersons, ministers and parliamentary majority acquirers of the Congress are resorting to untruths and half-baked logic. They are disguising facts. They are insisting that FDI in multi-brand retail amounts to a purely executive decision and does not require parliamentary sanction or approval.

3. This is a bogus reasoning and flies in the face of evidence before us, including as validated and upheld by the highest court in the land, the Supreme Court of India. Every action of the government, of any government, can be scrutinised by Parliament, which is the embodiment of the people of India and their sovereignty. However, in the case of FDI in multi-brand retail, not just is a change in the norms amenable to placid parliamentary scrutiny but also to vigorous parliamentary sanction.

4. Change in FDI regulations can be made only by the Reserve Bank of India (RBI) in turn changing regulations in the Foreign Exchange Management Act (FEMA) of 1999. From time to time, the RBI issues notifications making such changes in or amending the regulations. Section 48 of FEMA mandates that all such changes be laid on the Floor of the House; such changes are called “subordinate legislations” as per the Constitution of India.

5. Rule 234 of the Lok Sabha rules has laid down that every regulation made under any legislation – and this includes “subordinate legislations” – should be placed on the Floor of the House, if so required by the legislation, as soon as it is made. So far every regulation and amendment made by the RBI under FEMA has been placed before Parliament.

6. For example, the RBI amended FDI regulations on August 22, 2008, when it came to introducting FDI in sinlge-brand retail. The regulation was published in the Gazette of India no. 896 [E] on December 30, 2008, and placed on the table on the Lok Sabha on February 18, 2009. This too concerned Section 48 of FEMA.

7. On October 19, 2012, the RBI amended regulations to allow FDI in multi-brand retail. This was published in the Gazette of India no. 795 [E] on October 30, 2012. It should have been put on the table of the House at the beginning of the Winter Session. Why has this not happened?

8. Under rule 235 of the Lok Sabha rules any member can seek an amendment to the regulation and ask for a vote that will bring back FDI in multi-brand retail to Annexure A (sectors in which FDI is prohibited) and not approve its transfer to Annexure A (FDI permitted). This is the right of the House.

9. A vote can be demanded under rule 235 and the Speaker has to fix a time and date for putting the amendment proposed by the MP to vote. Parliament NEEDS TO THINK about the option of rule 235 much more closely.

10. The government, devious to the very end, is seeking to hoodwink Parliament, deprive it of its due right and is attempting to explain away the changes in FDI rules as merely an “enabling framework”, a milk-and-honey expression that means nothing. This is semantic jugglery. Enabling framework or no enabling framework, we are discussing legislation here – and legislation comes under the purview and superintendence of Parliament. No more, no less.

11. This government cannot be trusted with the FDI in multi-brand retail issue. It has a dubious history on this count and seems determined to allow in foreign chains for some ulterior motive. When the RBI did not initially notify the amendment to the relevant regulation in October 2012, a petitioner moved the Supreme Court – writ petition 417/2012 – saying the due process was not being followed in case of multi-brand retail.

12. On October 15, 2012, the Supreme Court heard the petition and got a commitment from the Attorney General that the due process would be followed. It advised the petitioner to wait till the end of the Winter Session of Parliament to ascertain where the new regulations allowing FDI in multi-brand retail had been placed in both Houses of Parliament.

13. It has been a week since Parliament convened. We are still waiting for the government to come good on its promise and indeed its Constitutional obligation.

14. The Trinamool Congress and its leader, Ms Mamata Banerjee, chief minister of West Bengal, have been the original and unstinting crusaders in the matter of FDI in multi-brand retail. Other parties have periodically jumped on and off the issue. Some of them are seeking deals with the government, others are seeking publicity. Only the Trinamool Congress has a consistent and principled opposition to FDI in multi-brand retail at this stage of India’s development.

Jai Hind, Jai Bangla, Vande Mataram, Long Live Ma Maati Manush