FDI relaxations draw Left ire
Cabinet’s approval for liberalising FDI norms in certain sectors has come in for severe criticism from the Left.
By TNN |
NEW DELHI: Cabinet’s approval for liberalising FDI norms in certain sectors has come in for severe criticism from the Left. The CPM on Thursday asked the government to reconsider the decision saying that it was not in line with the National Common Minimum Programme, which stated that the goverment would encourage FDI only in areas like infrastructure, high technology and exports.
The CPM is particularly against raising of foreign equity cap in the petroleum refining PSUs, commodity exchanges, titanium mining and further liberalisation of norms in cargo airlines as well as ground-handling operations.
“The decision to raise foreign equity cap from 26% to 49% in petroleum refining PSUs would pave the way for further disinvestment in PSUs.
A condition for compulsory disinvestment of 26% to an Indian partner in case of petroleum trading and marketing companies has also been done away with. The CPM is strongly opposed to these policy moves, which seek to enhance the presence of foreign companies in the strategic petroleum and natural gas sector,” the CPM polit bureau said.
Dubbing as “unwarranted” the decision to allow FII upto 4x% in commodity exchanges, it accused the government of being “impervious” to the opinion across the political spectrum that liberalisation of commodity exchanges was not in the interest of maintaining price stability in the economy.
Recalling that the government had earlier issued an Ordinance to amend the Forward Contracts Regulation Act enabling participation of foreign players in the commodity futures market, the CPM said a Parliamentary Standing Committee had opposed such a provision.
It described allowing 100% FDI in titanium mining as another “retrograde move” saying the government was keen on privatisation and opening up of the mining sector instead of strengtheing the public sector in extraction of exhaustible minerals. The CPM said further liberalisation of FDI norms in cargo airlines and ground-handling operations needed to be reviewed from the security aspect.
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The CPM, which has set out three guidelines for foreign investment in the country, had stalled the government’s decision to raise FDI in the insurance sector by saying that it will oppose any bill paving the way for it.
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