New Delhi:
The Supreme Court today asked the Centre to file a response on how it intends to safeguard interests of small traders after the government's decision to allow Foreign Direct Investment or FDI in the retail sector.
"Have you got any investments or just a political gimmick? Has the FDI policy brought some fruits?" the Supreme Court bench asked.
Hearing a Public Interest Litigation (PIL) challenging the FDI notification by the Centre, the top court said some regulatory measures are needed.
"What are the checks put by the Centre in the policy so as not to affect the small traders to allay the fears of small traders? If big companies adopt unfair trade practices and bring down the prices what will happen to small traders?" the court said.
Representing the government, Attorney General Goolam E Vahanvati said all these aspects were considered by Parliament which debated it and rejected the motions against the FDI policy.
"It is not a political gimmick but part of serious reforms. It is a matter of government policy, and now applications are coming for investment," said the Attorney General.
The bench then said, "Reforms can go on but that should not close the doors for small traders. We are not policy makers, but a policy has to be within the Constitutional parameters. We do not substitute policies but whether it is reasonable or violate the Constitution."
The court has asked the Centre to file an affidavit within three weeks.
In December last year, the government - with the support of the Samajwadi Party and Bahujan Samaj Party - won a crucial vote in Parliament on its decision to allow FDI in multi-brand retail. The vote was non-binding but tested the ability of the Manmohan Singh led government to help push important legislation and reforms. The government was pushed into minority since Mamata Banerjee's Trinamool Congress exited in September to protest against tough reform measures, including FDI.
FDI in multi-brand retail will allow global retail giants such as Wal-Mart to set up shop in the country's $450 billion (Rs. 2,500 crore) retail sector, and is aimed at drawing more overseas investment and taming inflation.