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FDI policy in multi brand retail upheld by SC

21st May, 2013

A three judge bench of the Supreme Court has dismissed the petition challenging the FDI policy in multi-brand retail.

Power of Central Government to make policies

The challenge was on the ground that the policy by the Department of Industrial Policy and Promotion (DIPP) was without the authority of law. It was contended that the Central Government has no power to make policies regarding FDI as such prerogative rests with the Reserve Bank of India as per the Foreign Exchange Management Act 1999.

DIPP empowered to frame policy

The Court, while dismissing the petition, held that DIPP is empowered to frame policies regarding FDI. According to the order, the Court will not interfere with policy matters unless they are unconstitutional, contrary to statutory provisions arbitrary or in abuse of power. It was noted that the FDI policy is only an enabling policy and the State Governments and the Union Territories are free to take their own decisions. [Manohar Lal Sharma v. UOI, Order dated 1-5-2013 in Writ Petition (C) No. 417 of 2012].
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