The Government’s decision to raise FDI cap in certain sectors has evoked strong reactions from the Opposition parties, which accused the Centre of “mortgaging economy to foreign capital” and taking decisions under “influence” of the West. The Congress expectedly defended the decision saying the measures will shore up the economy and asserted the UPA Government’s record of attracting 619 per cent more FDI than the previous NDA regime per year.
The BJP claimed the decision was “hasty” and sought to know from the Government if it was a “fallout” of Finance Minister P Chidambaram’s US visit. “The UPA Government’s decision is taken in haste and under pressure from developed western countries. BJP will examine the merit of each and every proposal,” BJP spokesperson Prakash Javadekar said here.
Javadekar said the Government ignored national security aspects while approving the decision. “In the defence sector, we have to ensure that we get access to latest technology otherwise junk material will be dumped here,” he said.
Party’s deputy leader in Rajya Sabha Ravi Shankar Prasad wondered whether the UPA has run out of idea that it was focusing on FDI to save the economy. “The panic decision taken by the Government on FDI is not going to impact the Indian economy which is indeed in a terminal state. The story of India has come under a serious cloud under the leadership of Sonia Gandhi and Prime Minister Manmohan Singh,” Prasad told reporters.
He said that the Indian economy was in a bad shape and when even the Indian investors are not putting their money here, why will the foreign investors invest their dollars. Prasad asked Chidambaram if this step is fallout of his visit to the US where he was “reprimanded” for the problems with the Indian economy.
For their part, the left parties blamed the UPA Government for “mortgaging the economy to foreign capital.” Terming the Government’s FDI policy as disastrous, the left parties said they along with other Opposition parties would thwart this move in Parliament.
“This bankrupt policy of the Government is motivated by the need to attract more foreign capital flows to meet the widening current account deficit. But the supine attitude of the Government to foreign capital is only going to lead to further flow of profits and resources out of the country. Already the Government has given up the claim on the capital gains tax which the Vodafone has to pay. The Government is proposing to dilute the norms for investment in multi-brand retail which is going to adversely affect domestic industry,”
said CPI(M) politburo in a statement.
“This is a disastrous and desperate measure taken by the Congress led UPA-II Government. The economy is already in bad shape. The value of rupee against dollar has declined to the lowest level. GDP growth rate has declined to less than 5 per cent. Unemployment has increased, making the future of Indian Youth very bleak. Prices of essential commodities have shot up. Oil marketing companies are hiking the prices of diesel and petrol arbitrarily and frequently,” said CPI central secretariat.
CITU general secretary Tapan Sen, termed the FDI in defence production sector as most atrocious.
The Congress defended the Government decisions saying it would shore up economy even as it denied any division between the Government and Defence Minister AK Antony over increasing FDI limit in defence sector. Congress spokesperson Raj Babbar said that adequate safeguards have been taken.
He said the UPA Government has been successful in attracting 619 per cent more FDI than previous NDA regime per year. During UPA regime 272 billion dollars FDI during the past nine year which is an average of 30.02 billion dollar per year while in the first four years of NDA regime in this millennium was 19.4 billion dollar which is an average of 4.85 billion per year.