AMENDMENT IN FEMA RULES BY RBI NEEDS TO BE PASSED BY PARLIAMENT
TO MAKE FDI NOTIFICATION EFFECTIVE
SECTION 48 OF FEMA ACT AN IMPEDIMENT FOR LEGALITY OF FDI NOTIFICATION
" The FDI notification can be valid and effective only if the
amendments made by Reserve Bank of India in rules & regulations of
Foreign Exchange Management Act, 1999(FEMA) are approved by "each house"
of the Parliament which is an inherited provision in Section 48 of the
FEMA Act. The said provision is explicit and do not have ambiguity or
discretion"-said Mr. Praveen Khandelwal, Secretary General of the
Confederation of All India Traders (CAIT) which is spearheading a
national movement against FDI in Retail. The Goverment is terming it
merely as an executive order which does not need approval of the
Parliament is factually a distortion of facts-added Khandelwal.
Looking at the dubious role of the Government on
this issue, the CAIT in a communication sent today to Parilamentary
Party Leaders of all political parties has drawn their attention to the
provision of Section 48 under which such amendments must be passed
within 30 days from the date of its introduction in the Parliament. As
per parliamentary procedure any such amendment will go to Committee on
Subordinate legislation of each house which will scrutinise the same and
will submit its report to Presiding Officer of their respective house
and then house will decide the issue. The House may agree, disagree or
modify the amendment and will effect only in such modified form or be of
no effect. Therefore, as of now the notification is not more than a
paper of fdi policy which do not have any legal sanctity.
Questioning the intent of the Government to engage
in some sort of delaying tactics to get the time period of 30 days over
without placing the issue before each house of Parliament , the CAIT has
advised different party leaders to give due & needed concentration
on the movement of the said amendment in order to esnure that within
stipulated period, the amendments must be discussed in each house of the
Parliament.
Calling the notification as an enabling policy for
the states to decide whether to implement the same or not by Commerce
Minister Shri Anand Sharma, Mr.Khandelwal said it is misledaing since
the GATS agreement under WTO and 82 Bilaterlal Investmention Promotion
Treaties signed by the Govt with various nations binds the Government to
provide "national treatment" to foreign investor which implieds that no
discrimination can be made between a domestic company and the foreign
investor. Therefore, the States have no choice.
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