Opposition, Samajwadi Party criticize govt for revised FDI norms

Opposition, Samajwadi Party criticize govt for revised FDI norms
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First Published: Thu, Feb 12 2009. 11 28 PM IST
Updated: Thu, Feb 12 2009. 11 28 PM IST
New Delhi: An ally of the ruling party joined the opposition parties on Thursday in attacking the Union government for easing foreign direct investment, or FDI, limits in domestic companies.
Amar Singh, general secretary of the Samajwadi Party, or SP, said the issue is so serious that it, along with the other opposition parties, could pull down the government over it.
“It is a wrong decision which has serious implications,” he said. The SP, which backs the United Progressive Alliance government at the Centre, had helped it win the crucial 22 July confidence vote after Left parties withdrew outside support over the Indo-US civil nuclear deal.
According to Singh, at the business advisory committee (BAC) meeting of the Rajya Sabha on Thursday, the SP, along with the main Opposition Bharatiya Janata Party, or BJP, and the Left parties demanded a discussion over the issue in Parliament.
BACs of each House—that comprises leaders of all parties in Parliament—decide the agenda for the session.
“This (government decision) would lead to back-door entry of FDI in key sectors such as media, communication and others. The Opposition as well as the SP is opposed to this,” Singh said outside Parliament.
Saying that he had written to commerce minister Kamal Nath warning against any move to allow FDI in key sectors, Singh said even the finance ministry had opposed it.
In a move that could help attract foreign capital, the government on Wednesday revised FDI norms that effectively dilute contentious investment ceilings in many sectors such as telecom, insurance and aviation. According to the new norms, management as well as economic control would be the defining criteria to determine whether or not a foreign holding was to be treated as FDI. If a company was “ultimately” owned and controlled by resident Indian citizens, the foreign holding will not be taken into account for calculating the FDI ceiling.
After the BAC meeting, Communist Party of India leader and Rajya Sabha member D. Raja told Mint: “The government said the issue could be discussed during the debate on the interim budget.”
The budget session of Parliament began on Thursday and is scheduled to end on 26 February.
Meanwhile, BJP leader S.S. Ahluwalia said the decision could lead to a flow of “dirty money” into the country.
He said, “Primarily, there is a security concern over this decision. Secondly, when the entire world is suffering from recession, God knows what kind of money (will be) coming in the name of FDI.” He added, “Besides, such decisions cannot be taken in the last minute. Let the new government decide on these issues.”
The Communist Party of India (Marxist) also lashed out at the government saying it is “bent upon eroding the economic sovereignty of the country”.
However, an ally of the BJP-led National Democratic Alliance, the Janata Dal (United), or JD(U), called the move “positive”.
“The economy needs to be boosted now. If the government is honest, I do not think that it is a bad move. But one has to keep vigilant when it is implemented,” said Digvijay Singh, JD(U) leader and Rajya Sabha member.
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First Published: Thu, Feb 12 2009. 11 28 PM IST
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