New Delhi: Government’s new policy on excluding indirect FDI from the sectoral caps came in for a sharp criticism in the Rajya Sabha today from the Left parties, which said it is enabling foreign investors to break the ceilings through backdoor channels.
“By this (change in policy), there will be no sectoral cap in telecom, defence and aviation. Even in retail sector, FDI can make backdoor entry,” Moinul Hassan of CPI-M said during Zero Hour.
The Cabinet Committee on Economic Affairs made changes in the FDI guidelines on 11 February. Under the new rules, the FDI in investing company owned and controlled by Indians will not be counted in determining the caps in its joint venture with another foreign firm.
With the changes in the policy, the foreign investors (direct and indirect) -- will be able to cross the sectoral caps.
Raising the matter, Hassan, supported by his Left party colleagues, said the policy change was tantamount to showing “utter contempt” to Parliament on the eve of the session.
Describing the matter as very serious, he demanded that the new guidelines be rescinded.