The Opposition slammed the government’s decision to liberalise FDI norms in various sectors, with the main Opposition BJP on Wednesday describing the government’s decision to increase FDI in telecom and insurance as a “panic reaction” when the economy is going downhill.
“The panic decision taken by the government on FDI is not going to impact the Indian economy, which is indeed in a terminal state,” BJP deputy Leader in the Rajya Sabha Ravi Shankar Prasad said. He claimed India’s story has come under a serious cloud under the leadership of Congress president Sonia Gandhi and PM Manmohan Singh.
The government on Tuesday had announced liberalisation of the FDI norms and caps in about a dozen sectors.
“FDI in telecom sector has been increased from 74 per cent to 100 per cent and 74 per cent is a dominant investment. If at 74 per cent India is not able to get foreign investment, then how can one expect this at 100 per cent?” Mr Prasad asked.
The BJP asked if the FDI decision was a fallout of finance minister P. Chidambaram’s recent visit to the US, where, the BJP alleged, he drew flak for problems with the Indian economy. On allowing 49 per cent FDI in insurance, the BJP said the matter is with the parliamentary standing committee and an understanding had been reached, in which the Congress was also a party, that the limit should be 26 per cent. “Then why this panic reaction?” Mr Prasad asked.
Left parties lambasted the government for “mortgaging” the economy and demanded immediate rescinding of the decision.
“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 CPI(M) politburo said in a statement adding that “The UPA government is out to mortgage the economy to foreign capital.”
Demanding withdrawal of the decision, the CPI said the government had opened up the telecom sector when the country was “yet to overcome the loot and losses due to the 2G spectrum scam.”