The government has finally passed the litmus test and FDI in retail is all set to become a reality anytime soon. FDI in retail has received clearance from both the upper and lower House of the Parliament.
Post FDI in retail, the government will look at more reforms and the government will talk to the opposition party, BJP to get clearances on insurance and pension reforms.
Sharma says that House of people has voted on FEMA amendment, it will be tabled in the Rajya Sabha by the ministry of finance and the amendment to it is not required to be passed by both the Houses. He also said that the judiciary must also respect decisions taken by the executive. The government has boosted investors' confidence.
He also hinted that FDI will be implemented in Himachal Pradesh, if Congress comes to power.
Below is the edited transcript of his interview to CNBC-TV18.
Q: Is FDI now the law of the land because there seems to be some confusion on whether this is law of the land yet because the Foreign Exchange Management Act (FEMA) amendment has still not been tabled in the Rajya Sabha as per Section 48 of the FEMA rule?
A: It only needs to be tabled by the finance ministry in both the House of Parliament.
Q: However within 30 sittings if somebody wants to actually move an amendment?
A: Have the 30 sittings ended?
Q: No, they haven’t, but if somebody were to move an amendment within that 30 sittings?
A: Let’s see. It is for the chairman of Rajya Sabha to take a view. How can you and I talk?
Q: Sitaram Yechury has already gone on record today to say they will move an amendment.
A: Let him go ahead. They will meet the same fate. Our numbers will increase. I am not going to comment because that’s entirely the exclusive prerogative for the chairman of the Rajya Sabha.
Q: At the end of what has happened in the Lok Sabha and the Rajya Sabha today does this now become the law of the land?
A: Ofcourse, it has already become. It stands notified both by the Reserve Bank of India (RBI) and by my ministry.
Q: However, the Supreme Court had said that a mere notification by the RBI was not enough.
A: Can I tell you one thing. The Constitution of India, with due respect to our Supreme Court clearly demarcates the areas for the executive, legislature and judiciary. These are executive domain decisions and executive is accountable to Parliament. We have won the vote in both the Houses of Parliament. Never before in our history, executive policy decision has been called for discussion or vote. It is unfortunate that this has happened, but I am very happy. It exposes the double speak and hypocrisy of our opponents. Now that has happened and I am not in quarrel, let the judiciary do what is in their domain. Let them not question the sovereign legislature that’s the Parliament of India.
Q: However, it is also the right of every parliamentarian to be able to move that amendment?
A: I am not getting into that. I have answered your question.
Q: Let me now move to the fact that this is the law of the land, as you are saying, as of today?
A: Not as of today, it is the final thing.
Q: It is the final thing. You are saying it is cast in stone?
A: Tell me how can there be different yardsticks. Since the Constitution’s adoption in 1950, which executive decision has been rolled back? So, let’s not question India’s Parliamentary democracy. It is history. It is practiced 62 years later. Let us respect that.
Q: Let me now move to the fact that as has been debated in Parliament and something that you as well as Kapil Sibal, who was also leading the debate from the side of the government said; that at the end of the day what foreign investors are going to be looking at is opportunity. Is this enough of an opportunity given the kind of conditions that have been put forward by the government? At the end of the day they are only going to be able to open up in 18 cities as you yourself articulated.
A: No, I have not. I have never used the word 18 cities.
Q: Are you suggesting that, that is not a fact?
A: I said it’s the states which will decide. Read the press note. Eleven states, big states like Maharashtra, Andhra, Rajasthan, Haryana, have all opted for it. The rest, smaller states of the Union which do not have population of one million and above in any city, it has been left to their decision. They will identify and decide. Uttarakhand, Jammu Kashmir will do it, tomorrow Himachal will do it, Assam is doing it, Manipur is doing it. So, let’s wait.
Q: From a foreign investor’s point of view the layers of complexities that this policy actually entails, will it deter them from investing?
A: How can you expect me to speak for business decisions of the foreign investors? The policy is there, investment decisions are post establishment. That’s what I was trying to educate the Leader of Opposition about. Investors come to a country once the policy is put in place. Whether it is defence or telecom, foreign investors come. I am extremely sorry, let’s wait and watch. Single brand already major investors have come.
Q: You have made single brand retail open to FDI a 100 percent. We have had one Foreign Investment Promotion Board (FIPB) clearance for Pavers. Ikea has been cleared, but we don’t quite know what has happened.
A: Five have been cleared. If you want the details my ministry will make it available - including Brook Brothers, Zara.
Q: In terms of Ikea and that was the big ticket proposal, there seems to once again be confusion.
A: How can you expect a minister to get into technicalities? We have given the approval, they have to make their decision.
Q: Have they come back to you?
A: They don’t come back to ministers. I will have to ask my officials.
Q: You are confident that people like Ikea will be investing in India?
A: Absolutely. We have boosted investors’ confidence whereas our opponents have tried to vitiate the investment climate.
Q: There will perhaps be a larger outreach programme that you and your ministry will actually try to launch?
A: Why do you guys in the media question us when we take a decision? Please help us in creating a better climate and understanding. If you are always questioning, you will help those who are busy trying to scare away the investors. We have taken a decision, both the Houses of parliament have voted. Democracy has spoken and this is the final word. Lets talk about future.
Q: Are you going to now be meeting with foreign investors to sell the India story?
A: Why should I be meeting? I am not a salesman. This is not a job of a minister or a government. Government has to create an enabling and welcoming environment through a policy regime, which we have done. What I am looking forward to, are more reforms to attract more investments. This is not the only sector. Why people have not debated civil aviation, what we did in power, what we did in broadcasting? It is just a partisan agenda which has got debated and hijacked the entire discourse on investment.
Q: Since we are talking about the road ahead, do you believe now the fact that you have won this victory in both the Lok Sabha and the Rajya Sabha as far as one of the most controversial FDI related proposals was concerned.
A: Multi-brand retail stores are already there. You are saying that this is the most controversial issue and defence is like buying a tea cup.
Q: In terms of the road ahead, FDI related issues with pension and insurance, do you believe the BJPs opposition is now going to get more fierce, more cussed? Or do you believe the BJP in a sense will find itself out maneuvered having gone through what has happened in the Lok Sabha?
A; Its not out maneuvered, let me correct. They should not have taken the discourse to this point. We are determined, we will talk to them. I hope they realise that they have hurt India’s image and economy and do something which is in the interest of the country.
When you are in government, you open up 100 percent in aviation, 74 percent in telecom, we are asking for investment to come into India. We are not selling spectrum without a policy in place in telecom, which they did in broadcasting by the way where TV licenses were given, pan-India licenses without even a reserved price. We didn't as a responsible government reverse their decisions or question. So, I hope that they will realise that they have gone on a wrong path, which has hurt India's economy. After all it is our country - their's and ours. I am not saying there are two India’s one for the Congress or the UPA and one for the BJP.
Q: What is your sense in terms of those crucial FDI proposals related to insurance and pension? Is the government willing to fight another battle, the way that you fought for FDI in retail?
A: How can I speak for them? Why are you always talking of battle?
Q: You did fight a battle.
A: No, but why you are not talking of - we tried to build a consensus, which they never did. Why you are not talking of consultation and conciliation?
Q: Will there be further consultation and conciliation on insurance and pension?
A: Ofcourse. As far as we are concerned it is sad that they dragged it to this point. It should have never happened, but we are not embittered, I am making a political point that it should not have happened, I am making a constitutional point. But it doesn't mean that I am going to talk to them. I talked to Arun Jaitley soon after the debate was over. So it is not personal.
Q: Even though they made it personal?
A: They made it, but I leave it to their wisdom.