The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:
The Congress-led government has taken an outrageous step in liberalizing Foreign Direct Investment (FDI) guidelines. 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.
By this sleight of hand, there will be no sectoral cap on FDI in telecom, defence, aviation, media etc. In the retail sector, FDI can make a backdoor entry through these guidelines. In the insurance sector, the present cap of 26 per cent can be subverted. This is a device to bypass Parliament where a legislation to amend the law to increase the cap in insurance is pending.
What the Congress-led government has done at the end of its tenure is to ensure backdoor entry of FDI in virtually all sectors without limits.
It is a travesty for the government to claim that it will “send a positive signal in the present difficult economic scenario”. On the contrary, it will give a fillip to money laundering and other speculative capital flows.
The government has shown its utter contempt for Parliament by announcing these new guidelines on the eve of the Parliament session.
This latest measure shows how the Congress-led government is bent upon eroding the economic sovereignty of the country. The consequences of the strategic alliance and the nuclear deal with the United States are coming home to roost.
The Polit Bureau demands the rescinding of the new guidelines immediately.