FDI reforms: Opposition cries foul

Left parties expectedly lambasted govt for what they perceived as 'mortgaging' economy to foreign capital

A day after the United Progressive Alliance (UPA) government unshackled crucial sectors of the economy by inviting foreign direct investment,the Opposition, on Wednesday cried foul.

“The UPA government's decision has been taken in haste and under pressure from western nations. The BJP would examine the merit of each and every proposal,” Bharatiya Janata Party (BJP) spokesperson Prakash Javadekar told reporters.

BJP Deputy Leader in the Rajya Sabha Ravi Shankar Prasad said: “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.”

The Communist Party of India (Marxist) Politburo in a statement on Wednesday said, “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.”

The Left parties said the proposal to increase FDI in insurance had to be adopted through a legislation in Parliament. It added the dilution of norms for investment in multi- brand retail would adversely affect domestic industry.

The CPI (M) also attacked the government for allowing 100 per cent FDI in the basic and cellular services in the telecom sector.

As regards foreign capital beyond 26 per cent in defence production it was “fraught with serious implications” as it would open the way for foreign control of the vital sector, it added.

The Telugu Desam Party (TDP) accused the UPA of “mortgaging India's sovereignty to foreign multinationals.” TDP politburo member Yanamala Ramakrishnudu, in a statement on Wednesday, said, “The UPA government is driving Indian industrialists out of the country through its anti-industrial policies.” It described the FDI proposals as “retrograde.”

In response, the Congress spoke out in support of the government decision. In an official statement, the party cited facts and figures to bolster its claim that during the first four years of the National Democratic Alliance regime, the FDI inflow had been an average of $ 4.85 million a year. Under the UPA from 2004  till the present, it has been an average of $ 30 million a year i.e. a whopping 619 per cent more.

A senior Congress leader, while rejecting the charge that the decision was taken at the fag end of the UPA’s tenure to bolster the government prospects, asserted the economy could not fall prey to the whims of Opposition parties.