FEMA amendments tabled in Parliament

The government has tabled four amendments to the

regulations of the Foreign Exchange Management Act (FEMA) that are essential for the implementation of FDI in multi-brand retail. The government, which had earlier argued that its executive decision on FDI did not require any Parliamentary sanction, was asked by the Supreme Court to place its decision in both Houses.

In fact, a new angle was provided by the Opposition, particularly the Left parties, who argued that any changes in FEMA provisions would require Parliament’s approval. With the Opposition already sensing an opportunity to corner the government, UPA managers are trying to club the voting on two issues — on debate over FDI policy and the FEMA amendments. The FEMA vote is crucial for both sides as it could stall the implementation of FDI in multi-brand retail in case the Opposition wins in either House.

Earlier, the minister of state for commerce & industry, S Jagathrakshakan, in a written reply to a question in Lok Sabha had said vide Press Note 4 (2012 series) issued on September 20, 2012 certain conditions relating to FDI in single brand product retail trading have been amended. The amended policy, inter-alia, includes the following condition in respect of proposals involving FDI beyond 51 per cent in single brand product retail trading.