51% FDI in multi-brand retail OK: SC

New Delhi: After being cornered by the Supreme Court over scams and other controversies in the last few months, the government had something to cheer about on Wednesday, with the SC upholding the constitutional validity of the decision allowing 51% FDI in the multibrand retail sector.      A bench of Justices R M Lodha, Madan B Lokur and Kurian Joseph which, on Tuesday, tore into the CBI and the Centre over Coalgate, saw merit in attorney general G E Vahanvati's arguments and said the FDI policy was aimed at eliminating middlemen and helping farmers get a better price.Middlemen are a curse to India: SC  New Delhi: Upholding the government's decision on 51% FDI in multi-brand retail, the Supreme Court on Wednesday said, "Middlemen are a curse to the country. They work like Shylocks and suckers. If they are sought to be thrown out of the system, what is wrong with the policy?" It asked the petitioner, advocate M L Sharma, to point out constitutional and statutory deficiencies in the policy already debated and approved by Parliament last December.      Sharma argued that while nobody would shed a tear if middlemen were eliminated, the policy will hit small retail traders as they will be illequipped to compete with the might and business skills of multinationals venturing into the retail sector. The court found no merit in the petition and dismissed it.      The bench said it would not hazard a guess about the success of the policy, but there was no harm in giving it a chance. "The policy may fail, who knows? But it deserves a chance. The government has done studies and found that in countries where FDI in retail had been permitted, small traders continued to control an overwhelming percentage of food product retail chain," it said.      But before this, Sharma had pointed out certain procedural deficiencies in the notification of the decision permitting FDI in retail and had forced the government to rush with an amendment to the earlier notification, bringing it in order with Foreign Exchange Management Act regulations.      The court also took note of Vahanvati's contention that the implementation of the Centre's policy was optional and was not being foisted on states. Besides, the policy, when fully implemented, will touch the lives of only 13.3% of the country's population living in 53 cities. The government pointed out that its policy on FDI in multi-brand retail stipulated that retail sales outlets could be set up only in cities with a population of over 1 million.      "Even if the policy is fully implemented throughout the country, there are only 53 urban agglomerates/cities with million-plus population. These 53 comprise only 0.67% of the total number of cities and have a population of 160.7 million, compared to India's population of 1,210 million—which comes to around 13.3%," the Centre had said.      The government had given examples of China, Brazil, Argentina, Singapore, Indonesia and Thailand where FDI was permitted up to 100% and still local retailers co-existed with organized retail. "In Indonesia, even after several years of emergence of supermarkets, 99% of fresh food retail and 70% of all food retail continues to be controlled by traditional retailers," the Centre said.