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Posted on Jan 23, 12:26PM | IBNS
The Supreme Court on Tuesday asked the government to explain its plans of allowing Foreign Direct Investment (FDI) in the the country's multi-brand retail sector.
It has asked the government to state whether the decision is more than "a political gimmick."
The judiciary has ordered the government to explain in three weeks how it plans to protect the interests of small-scale retail traders after international giants like Wal-Mart start selling directly to the Indian customer.
During the hearing of a Public Interest Litigation (PIL) that challenges the liberalisation of the country's supermarket sector, the judge was quoted as saying, "Has the policy brought some investment in the country or is it just a political gimmick. Has the policy brought some fruits?"
The judges has also suggested that a regulatory mechanism is needed to protect local retail stores.
"Any policy is not sacrosanct and it must be within the constitutional parameters. We are not policy makers and we cannot substitute government policy but we will see that it is reasonable and within the constitutional framework," reports said.
The Indian government's decision to allow 51 percent Foreign Direct Investment in multi-brand retail, while lauded by investors and industry, invited sharp criticism from the opposition parties and retail associations.
The move also left Prime Minister Manmohan Singh's United Progressive Alliance (UPA) coalition in a lurch as its second-biggest constituent party Trinamool Congress (TMC) withdrew her support.