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FDI: Govt, Left spar over FEMA amendment
Tribune News Service

Upping the ante
The Left parties have intensified their opposition to the FDI by initiating a campaign to mould public opinion against the move. After holding rallies in Bangalore and Patna, the Left party leaders will converge in Delhi on Monday for a big rally. “This is part of a series of rallies we have decided to hold in various state capitals and cities,’ CPM’s Prakash Karat said. The Left parties say the FDI would not only hit small shopkeepers and traders but farmers too in the long run.

New Delhi, December 2
Even before the Lok Sabha debates this week the move to allow foreign investment in multi-brand retail in the country, the Left-led Opposition and the government today were at loggerheads over a technical aspect that has the potential to stall the implementation of the reform initiative.

The government cannot implement FDI unless an amendment is made in the Foreign Exchange Management Act (FEMA). The Reserve Bank of India had issued a notification on October 30 amending FEMA. The government is required to inform Parliament about the changes as soon as possible as required by law. The government has 30 working days of Parliament to get the amendment passed.

On Sunday, there were divergent views on how the amendment needed to be passed. While Parliamentary Affairs Minister Kamal Nath said only one House needs to approve the move, CPM’s Sitaram Yechury insisted both Houses have to clear it.

The government on Friday tabled four amendments to the FEMA. That’s when the Opposition sensed an opportunity to corner the government.

In an interview on a television show, Nath said the FEMA notification dealing with the amendment needs to be passed only by one House. “If one House has passed it, it passes. It does not need both Houses to pass it. That's what is prescribed in the Rules,” the minister said. He, however, pointed out that there were separate rules for the Lok Sabha and the Rajya Sabha.

The crux of the technical debate is the CPM-led move to corner the government in Parliament on the amendment since the latter does not have adequate number of MPs in the Rajya Sabha for getting it passed unlike the Lok Sabha, where the ruling coalition has an edge.

“Section 48 of the FEMA-1999 explicitly states that any amendment to the rules and regulations under this Act made by the RBI must be tabled in both the Houses of Parliament as early as possible. And once tabled, any member of either House can move amendments to the RBI amendment and can even move for the annulment of the RBI amendment within 30 days. Any such amendments would have to be considered by the House and decided upon. This can happen only through a vote,” Yechury said.

“There is no way that the UPA-II government can avoid a vote in Parliament on this issue,” he said.

Interpreting the rule, former Lok Sabha Secretary General PDT Acharya, told The Tribune: “If the Act explicitly states that if there is a statutory provision that amendments to rules and regulation, which is an executive decision, needs approval of both the Houses, then there is no option. Rejection by any House would mean the amended Act cannot be implemented.”

As for the 30-day sitting period during which the amendment has to be taken up by the House, Acharya said in case it is not possible in the current session, the calendar would begin from day one of the subsequent session.

On his part, Nath accepted that the FEMA notification, which can be passed in the budget session as well as the government has 30 working days of Parliament to get the nod, may drag into the next session, which is three months away.





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