Apex court tells Centre - Spell out steps to protect small traders

Is FDI in retail a “political gimmick”? This was what the Supreme Court today asked the Government, seeking its response on how it intends to safeguard the interests of small traders after opening up the retail sector to foreign direct investment (FDI).

The apex court said the interests of small traders should not be affected by FDI in retail.

It said small traders fear their businesses would be affected with the coming of multinational companies, and this needs to be allayed by the government through a regulatory mechanism.

Response in 3 weeks

A Bench headed by Justices R.M. Lodha and S.J. Mukhopadhaya asked the Centre to file its response on these aspects within three weeks and also asked whether some foreign investment had come into the country after the retail sector was opened up or if it was just a “political gimmick”.

“What checks are there to ensure that free trade is not affected, particularly the interests of small traders,” the Bench asked, while hearing a public interest litigation (PIL) filed by an advocate questioning the Centre’s policy. .

“Apprehension is there in the minds of people that small traders’ interests would be affected. How do you intend to allay the fear? Some regulatory mechanism has to be there,” the Bench said.

Favouring a regulatory framework to protect small traders, the Bench said the big companies can bring down the prices of commodities through unfair trade practices, forcing small traders to shut shop after which the companies could hike prices and monopolise the market.

“Has the policy brought some investment into the country or is it just a political gimmick. Has the policy brought some fruits?” the Bench asked the government.

‘Approved by House’

Expressing reservation on scrutiny of the policy by the Court, Attorney-General G.E. Vahanvati said it is a policy matter that has been approved by Parliament and all these aspects were discussed by MPs.

The Bench, however, said Government policies are not sacrosanct and the Court has a right to see that the policy is reasonable and within the Constitutional framework.

No policy is sacrosanct

“Any policy is not sacrosanct and it must be within constitutional parameters. We are not policy-makers and we cannot substitute government policy but we will see that it is reasonable and within the constitutional framework,” the Bench said. The court adjourned the matter for five weeks.

The Confederation of All-India Traders welcomed the court’s observations on protecting the interests of small traders.

“The issue raised by the court for the protection of small traders is a welcome step. We have always advocated that the Centre must put in place a mechanism or regulatory framework to protect the interests of small traders, who are very apprehensive about the FDI policy in retail,” the association’s General-Secretary Praveen Khandelwal said.

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