Attorney General G E Vahanvati cites Barack Obama in 2G Presidential reference in Supreme Court

NEW DELHI: Citing US President Barack Obama's remarks on the issue of FDI in India, Attorney General G E Vahanvati today told the Supreme Court that the country will become a "laughing stock" if auction is made the only route for allocation of natural resources.

Arguing on the Presidential reference on allocation of natural resources arising out of 2G spectrum verdict, Vahanvati quoted Obama's comments(in an interview to PTI) to buttress his arguments.

"If all natural resources are auctioned, then India will become a laughing stock internationally. Foreign investors will say it is not safe to invest in India. Even the US President is saying it is not safe to invest in India," Vahanvati told a five-judge constitution bench headed by Chief Justice S H Kapadia.

The AG was referring to Obama's remarks that India prohibited foreign investment in too many sectors such as retail. Obama also cited concerns over deteriorating investment climate to endorse another "wave" of economic reforms.

The government contended that apex court's verdict on 2G case has created tremendous confusion and it would have huge implication on foreign investment in the country.

"It is not possible to adopt auctioning process for all natural resources. Why anybody will come to India if it is going to be challenged in the Supreme Court (if any other method is adopted for allocating resources)," Vahanvati said.

His arguments found support from various industries and corporate bodies.

The corporate bodies also contended that all natural resources in all sectors cannot be allocated by following the policy of auction.