Oppn flays govt for easing FDI norms

NEW DELHI: The Manmohan Singh government's last-minute move to ease FDI norms caused a ruckus in the Lok Sabha on Friday. The Opposition lashed out at the government for making a 'clandestine move' on the eve of Parliament session to allow more foreign investment virtually in all sectors.

According to the Cabinet decision on Wednesday, equity investment routed through companies in which Indians hold majority ownership and control will now be treated as domestic equity. Congress' ally Samajwadi Party also opposed the move saying it would lead to backdoor entry of FDI in key sectors such as media and communication.

The CPM, which raised the issue as soon as the House met, had given a notice for adjournment of the question hour to discuss the issue. However, with the demand rejected, CPM leaders registered their protest at a press conference outside the House.

"At the time of recession, India is trying to import crisis from the west," CPM MP Mohammad Salim said. He alleged that the decision was being deliberately taken just ahead of the session and at a time when the Congress-led
regime was nearing the end of its tenure.

"They were aware that it would not get parliamentary approval. They have opened all sectors. There is increasing dependence on foreign capital," he said.

Mr Salim said the government���s policy of lifting sectoral caps included sectors like defence, despite the presidential address emphasising on indigenous production. The party politburo had issued a statement saying it was a device to bypass Parliament, where a legislation to amend the law to raise FDI cap in insurance sector is pending.

"At one stroke, across the board, the sectoral caps on FDI have been nullified by excluding investments by companies owned or controlled by Indians having substantial foreign capital. By this re-definition, FDI can be routed through Indian companies and not be classified as FDI," the CPM said.

The BJP said it could lead to flow of "dirty money" into the country, particularly in times of recession.

BJP spokesman Prakash Javadekar said there had been opposition when FDI cap was being raised beyond 26%. "The fact is that the global financial situation today is such that even if you give such concessions, there is no likelihood of any real FDI flow coming into the country. We need real FDI. We want to also want to change the PM route and the Mauritius route that people are adopting to plough back their money," he said.