The Uttar Pradesh Legislative Assembly recently passed a resolution calling for the division of Uttar Pradesh [U.P] into four States. But the procedure for formation of new States laid down in Article 3 of the Constitution provides that a State has no say over the formation of new States beyond communicating its views to Parliament. Article 3 assigns to Parliament the power to enact legislation for the formation of new States. Parliament may create new States in a number of ways, namely by (i) separating territory from any State, (ii) uniting two or more States, (iii) uniting parts of States and (iv) uniting any territory to a part of any State. Parliament’s power under Article 3 extends to increasing or diminishing the area of any State and altering the boundaries or name of any State. Two checks constrain Parliament’s power to enact legislation for the formation of new States. Firstly, a bill calling for formation of new States may be introduced in either House of Parliament only on the recommendation of the President. Secondly, such a bill must be referred by the President to the concerned State Legislature for expressing its views to Parliament if it contains provisions which affect the areas, boundaries or name of that State. As can be seen, the only role that the U.P. State Legislature [the Legislative Assembly and Legislative Council] will play in any future formation of new States is when the President calls for its views to be placed before Parliament. Parliament will not be bound by these views in the process of enacting legislation for the formation of new States.
After months of discussion, the issue of FDI in retail is being deliberated in the Lok Sabha today. In September 2012, the Cabinet had approved 51% of FDI in multi-brand retail (stores selling more than one brand). Under these regulations, foreign retail giants like Walmart and Tesco can set up shop in India. Discussions on permitting FDI in retail have focused on the effect of FDI on unorganised retailers, farmers and consumers. Earlier, the central government commissioned the Indian Council for Research on International Economic Relations (ICRIER) to examine the impact of organised retail on unorganised retail. The Standing Committee on Commerce also tabled a report on Foreign and Domestic Investment in the Retail Sector in May, 2009 while the Department of Industrial Policy and Promotion (DIPP) released a discussion paper examining FDI in multi-brand retail in July, 2010. Other experts have also made arguments – both in support of, and in opposition to, the move to permit FDI in retail sales. The table below summarises some of these arguments from the perspective of various stakeholders as collated from the above reports examining the issue.
| Stakeholder |
Supporting arguments (source) |
Opposing arguments (source) |
| Unorganised retail |
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| Farmers |
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| Consumers |
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Source: ICRIER [1. "Impact of Organized Retailing on the Unorganized Sector", ICRIER, September 2008]; Standing Committee [2. "Foreign and domestic investment in retail sector", Standing Committee on Commerce, May 13, 2009]; Singh (2011) [3. "FDI in Retail: Misplaced Expectations and Half-truths", Sukhpal Singh, Economic and Political Weekly, December 17, 2011]; Reardon and Gulati (2008) [4. "Rise of supermarkets and their development implications," IFPRI Discussion Paper, Thomas Reardon and Ashok Gulati, February 2008.]; DIPP [5. "Discussion Paper on FDI in Multi-brand Retail Trading", Department of Industrial Policy and Promotion, July 6, 2010]
