The Centre may have to defer till November 5 implementation of its decision allowing FDI in retail trading with the Supreme Court pointing to a technical glitch. A bench comprising Justices R M Lodha and A R Dave agreed with PIL petitioner M L Sharma that the decisions relating to 51% FDI in multi-brand retail trading and 49% in civil aviation sector and power exchanges were not in consonance with the Foreign Exchange Management (Transfer of Issues of Security by a Person Resident Outside India) Regulations, 2000.
Attorney general G E Vahanvati pleaded that amendments to the regulations to support the new FDI decisions were a mere technicality and showed to the court RBI’s circular drawing attention of authorized dealer banks about the change in policy relating to receiving foreign direct investments.
Though it refused stay on implementation of the FDI decision, the bench asked, “Can the policy decision be in conflict with express provisions made in the regulations?
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