Decision on hiking FDI limits is panic-driven: BJP

Calling the government decision on hiking FDI limits as "panic-driven", the BJP Wednesday questioned if the government had run out of ideas to contain inflation and fiscal deficit.

"The panic-driven decision taken by the government on FDI is not going to impact the Indian economy, which is indeed at its terminal stage," Bharatiya Janata Party (BJP) leader Ravi Shankar Prasad said referring to Tuesday's cabinet decisions to hike foreign direct investment (FDI) limits in areas such as telecom and insurance.

The BJP leader said government should tell people if it had no other options to bolster economy.

He told media persons here that the government was suffering from a "crisis of credibility" and there was "lack of transparency, corruption and adhocism".

"Why is the government making our economy FDI-driven? Why are Indians not investing in India," Prasad asked.

He said the government should tell how much FDI has come due to its much flaunted decisions on opening up the multi-brand retail sector and hiking cap for such investment in civil aviation.

"What is the exact investment that has come through FDI in multibrand retail," asked Prasad.

The government last year took a decision to allow FDI in multibrand retail despite strong reservations of many opposition parties.

Prasad questioned the government over its decision Tuesday to hike FDI in insurance from 26 percent to 49 percent.

He said some Congress members also were of the view that the FDI cap in insurance should be kept at 26 percent.

Prasad also questioned if the decisions to hike FDI limits were the outcome of Finance Minister P. Chidambaram's recent visit to the US.

"I would like to ask Mr. Chidambaram, is this decision a fallout of his recent visit to Washington, or the flop roadshow in Japan," Prasad said.

He said everything else was going down except "inflation, current account deficit and fiscal deficit".

"Indian economy is akin to 1991 (situation when India had to mortgage its gold for loans)," he said.

The government Tuesday decided to hike the FDI limits in a host of areas, notably telecom and insurance. It also cleared proposal to allow FDI beyond 26 percent in defence production on a case-to-case basis with the approval of the Cabinet Committee on Security.