Millennium Post

Jaya slams UPA on FDI

Tamil Nadu chief minister J. Jayalalithaa on Tuesday said the UPA government at the centre was acting at the behest of foreign interests in relaxing FDI.

In a statement issued here, Jayalalithhaa said: ‘Totally bereft of ideas, in a weak bid to show some pretence of a policy response to an adverse economic situation, the Cabinet Committee on Economic Affairs has recently approved the raising of the Foreign Direct Investment (FDI) caps in some sectors.’

‘These measures raise a number of serious concerns. Far from protecting the interests of workers and the common people of the country, the UPA government appears to be acting at the behest of foreign interests and some external rating agencies, which are frequently threatening to lower the sovereign rating to ‘junk status’ and thereby cowing down the weak UPA government at the centre, making it bend to its whims and fancies,’ she said.

Concerns were also raised on the issue of FDI in plantation sector from 49 per cent on automatic route and upto 100 per cent with FIPB clearance.

‘Tamil Nadu has a large number of small tea growers whose livelihood has to be protected. We cannot allow foreign investment in this sector to tip the scales in favour of the larger plantations and jeopardise small tea growers’, she said.

Jayalalithaa said the decision also raises serious security and related concerns, which have been ignored. According to her, the rupee depreciation against the US dollar is a direct reflection of the inept macro-economic management of the UPA government over the past several years.

‘The FDI relaxation by the Government is neither an effective nor an appropriate measure to tackle macro-economic imbalances faced by the country’, she said and suggested policy initiatives to promote exports and set right current account imbalances.

‘Short sighted policies of increasing FDI caps will not help the Rupee to strengthen. The announcements of this nature are only a knee-jerk reaction to the falling Rupee problem’, she noted.

Opposing the 100 percent FDI in the telecom sector, Jayalalithaa said the decision has ‘security concerns since foreign companies will be able to control the entire telecom network. Data security and privacy issues will arise, which will be very difficult to regulate. This was also witnessed recently in the case of a private service provider who had laid more emphasis on individual privacy rather than national security.’

She added that the move will benefit foreign companies that have incurred losses due to the apex court’s order in the 2G licence case.

‘Even advanced countries restrict foreign investment in the telecom sector for security reasons, whereas the government of India seems to be oblivious of these concerns,’ Jayalalithaa said.

On the FDI limit hike in the insurance sector, Jayalalithaa said the government was hoping the DMK would support it when the Insurance Law (Amendment) Bill, 2008, is moved in parliament for its passage.
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