Simpler FDI rules critical for achieving 9% growth: Mukherjee

Simpler FDI rules critical for achieving 9% growth: Mukherjee
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First Published: Wed, Feb 18 2009. 11 42 PM IST

Tactical move: The external affairs minister also claimed that Pakistan’s admission that some of its citizens were involved in the 26 November attack was a diplomatic victory for the United Progressiv
Tactical move: The external affairs minister also claimed that Pakistan’s admission that some of its citizens were involved in the 26 November attack was a diplomatic victory for the United Progressiv
Updated: Wed, Feb 18 2009. 11 42 PM IST
New Delhi: Unmindful of the general election due before May, the ruling United Progressive Alliance (UPA) on Wednesday defended economic reforms in Parliament, even as its former Left allies accused it of engaging in crony capitalism.
The exchange took place during a Lok Sabha debate before a vote of thanks to President Pratibha Patil’s address to Parliament’s joint session. The Left parties and the main opposition Bharatiya Janata Party (BJP) used the debate to strike postures with an eye on the elections.
Tactical move: The external affairs minister also claimed that Pakistan’s admission that some of its citizens were involved in the 26 November attack was a diplomatic victory for the United Progressive Alliance. Harikrishna Katragadda / Mint
Justifying the cabinet’s recent decision to simplify foreign direct investment (FDI) rules, external affairs minister Pranab Mukherjee, leader of the Lok Sabha, argued that it was critical for the country to achieve the desired 9% gross domestic product (GDP) growth.
“We require FDI. You may have ideological differences, which is permissible in a democracy...but please do not choke the flow of funds that is required for development of the developing countries. If we want to acquire 9% growth, it is needed,” Mukherjee said.
Pointing out that the UPA government’s economic policies led to a strengthening of public sector undertakings, Mukherjee said: “We should not believe in extreme views.”
The number of profit-making state-owned enterprises has gone up from 143 to 158 in 2007-08, he said.
The Left parties in both the Houses of Parliament criticized the government’s move to liberalize FDI guidelines, which is seen as an indirect way of easing investment caps in sectors such as print media, defence and telecom.
In the Rajya Sabha, Communist Party of India (Marxist), or CPM, politburo member Brinda Karat alleged that the decision would permit entry of large retailers such as Wal-Mart Stores Inc. that would adversely impact local retail stores.
Mukherjee, who is also the stand-in finance minister, reiterated that the government had inserted enough safeguards.
B.G. Varghese, political analyst and visiting professor, Centre for Policy Research, said: “With the recession and its impact on...employment... intensifying, we need foreign funds. To keep up the employment opportunities and the development works at this juncture, the government needs foreign funds. This must be the government’s counter-argument.”
While the BJP focused on terrorism and problems in agriculture, including farmer suicides, the CPM-led Left parties criticized the government on inflation and its response to the economic slowdown.
Mukherjee highlighted Pakistan’s admission that some of its citizens were associated with the 26 November Mumbai terror attacks as a diplomatic victory for the UPA.
“Diplomacy has paid (off), diplomacy has not failed. We did not mobilize a single soldier, we did not press the panic button, we did not lay mines on the border, but we said we expected Pakistan to fulfil its commitment...,” Mukherjee said in an obvious reference to the BJP-led National Democratic Alliance that had mobilized troops along the border with Pakistan after the terrorist attack on Parliament in 2001.
The foreign minister also said his government was opposed to retaliation. “Human liberty and values are sacrosanct and they have to be protected. So we cannot emulate certain other countries and retaliate.”
On the government’s refusal to accept amendments to include the issues of price rise and job losses, the Left parties pressed for a vote in the Lok Sabha. Both the amendments were defeated by a big majority after the BJP declined to vote.
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First Published: Wed, Feb 18 2009. 11 42 PM IST