Thapar Reverses Stand On Limiting Mnc Stake
The multinational corporations appeared to be firmly back in the driver's seat at the Associated Chambers of Commerce and Industry (Assocham) yesterday after the last of the Indian industrialists supporting a protectionist course backed out.
Lalit Mohan Thapar, chairman of the Assocham committee on foreign direct investments (FDI) and MNCs, yesterday retracted his earlier statement advocating a 40 per cent cap on foreign investments in the consumer goods sector. On his arrival from London, he told Business Standard, "Those were my personal views. And I am entitled to them".
"In the committee, we had agreed to let the government decide in its wisdom the level of ceiling it wants to maintain. I may have different views on this. But the committee had decided to recommend a cap of 40 per cent in sectors where the government does not mention any cap at the moment," he said.
Thapar was referring to his clarification at a news conference held nearly a fortnight ago to release the Assocham report on foreign investment. "Forty per cent," he had said when asked if the committee was in favour of any ceiling on foreign investment in the consumer goods sector.
He had added that the committee also favoured a dilution in the stake of the wholly-owned foreign companies to prescribed levels over a stipulated timeframe.
Assocham president H L Somany and its secretary-general V Raghuraman, who were present at the news conference, did not intervene to inform the newspersons that Thapar's statements were his own and not that of the committee.
Assocham, which boasts of a membership of all the top MNCs in the country, had created a flutter when it raised the flag of protectionism in its report on FDI.
The MNCs, however, were immediately up in arms against the report. Subsequently, all the Thapar panel members distanced themselves from the draft report.
Somany, who had initially raised the issue of patriotism, finally said that the objectionable portions against the MNCs were actually not mentioned in the report. He said that the statements on a ceiling on foreign investments were Thapar's own views. The retraction came after M K Sharma, one of the committee members who is also a director at HLL had shot the first salvo.
In a letter to the chamber, Sharma had said he was waiting for a rebuttal of reports that the chamber had recommended that foreign firms having 100% units should dilute their holdings within a specified time period and that an equity cap of 40 per cent be imposed on foreign investments in the consumer goods sector.