The differences between the RSS outfits and the Government over the latter’s decision for 100 per cent Foreign Direct Investment (FDI) in several sectors, particularly Defence, have been “ironed out” as “attaining self-reliance in the area” is turning increasingly important coupled with its job-yielding potential, according to sources in the BJP.
The Government’s decision last month to allow 100 percent in nine sectors including defence, aviation and retail, had put the Government and RSS affiliate organisations like Bhartiya Mazdoor Sangh (BMS), Bhartiya kisan Sangh (BKS) Swadeshi Jagran Manch (SJM) apparently at loggerheads.
BMS said the decision was taken without taking all stakeholders involved into confidence and asked Government review it lest it leads to protests. The RSS’ farmers unit, the BKS demanded a total roll back of the decision to allow FDI in fisheries and animal husbandry, stating that this “would crowd out the domestic market”. The SJM also opposed the FDI policy saying “Government’s policies cannot be allowed to overturn ours” and sought for a dialogue on the issue.
Sources in the BJP claimed that “dialogues” between the two sides have “softened” the opposition and objections to FDI, particularly in the defence area. According to sources in BJP, the BMS, the largest trade union in the country, was justified in raising its objections given their numbers and varied expressions.
Justifying 100 per cent FDI approval, they went on to say that the Government could in fact “leverage” RSS outfits objections during international negotiations. The idea of “export led growth is passé” and it is time to develop a long term “self-reliance” in the defence sector with a focus on transfer of technology. The domestic sector needs to be incentivised and more job required to be created, they said.
Announcing sweeping changes in country’s FDI policy, the Government opened up the airline business to 100 per cent ownership, relaxing rules for single brand retail and defence and putting most sectors on the automatic approval route.
Most of the sectors were put under automatic approval route, except a small negative list.
In the defence sector, the Government has dropped the ‘state-of-the-art’ clause for FDI over the 49 per cent limit. Instead, under the new policy, FDI up to 100 per cent will be allowed through the approval route where the country gets access to ‘modern technology’, substantially easing the
condition.
The FDI limit for the defence sector has also been made applicable to small arms and ammunition. In single-brand retail, Government has eased local sourcing norms for up to three years and another five years for ‘state-of-the-art’ and ‘cutting-edge’ technology. Sources in the party alluded to “changing times and changing needs” to have “a fresh approach” on such issues.