The Congress Monday dubbed the relaxation of FDI norms as a “panic reaction” by the government in the wake of RBI governor Raghuram Rajan’s decision to not opt for a second term.
The Congress Monday dubbed the relaxation of FDI norms as a “panic reaction” by the government in the wake of RBI governor Raghuram Rajan’s decision to not opt for a second term.
“It is a panic reaction to show the world that it is business as usual even after Raghuram Rajan announced his exit,” Congress spokesperson Jairam Ramesh told reporters.
Senior Congress leader and former defence minister A.K. Antony demanded withdrawal of the relaxed norms alleging it posed a “big threat” to national security and India’s independent foreign policy.
“Allowing 100 per cent FDI in defence sector means India’s defence sector is thrown mostly into the hands of Nato-American defence manufacturers,” Mr Antony said in a strongly-worded statement.
Noting that the government brought “sweeping” changes in the FDI policy immediately after the Prime Minister’s US visit, he alleged it posed a “big threat” to national security and India’s independent foreign policy. “Naturally it will affect India’s independent foreign policy too. It will also threaten national security. Moreover, it will have an adverse impact on the ongoing indigenous defence research activities in the country,” he said.
It is “very important” to note that all such changes happened immediately after Mr Modi’s recent American visit. Turning to the joint statement issued by Mr Modi and US President Barack Obama, he claimed it appears India has become a “security partner of America”. Noting that the statement says that both India and America will work together as equal partners for peace and security of the Asia-Pacific region, he said the announcement in the joint statement about the cooperation between India and America to ensure the security of Gulf and West Asia will also create “very serious problems”. Insisting that after the joint statement, the cooperation between India and US in defence sector was changed from a “friendly nature to a partnership,” he said it will naturally affect India’s relations with countries friendly to it. “I strongly condemn this move. It is against the interest of the country and its people. I also urge the Modi government to withdraw the decisions affecting national interest,” he added. Meanwhile AICC spokesperson Jairam Ramesh said the BJP, when in opposition, had always opposed FDI and after coming to power it is singing a different tune ,calling it a “magic wand” to turn around the economy.
“Domestic investment is far more important than FDI and, only through FDI, we are not going to be able to solve India’s problems,” Mr Ramesh said. In fact, 50 per cent of FDI that is coming into India, is coming only into the e-commerce sector, he added.
Besides, he said, the Congress does not believe that “FDI is the answer (to our problems), it is an important instrument for economic growth but it is not the main instrument of economic growth”. He alleged that the “suit boot ki sarkar” ensured the exit of Raghuram Rajan as the RBI Governor had made a strong pitch for cleaning the balance sheets of banks and therefore, those who “looted” the banks through huge loans were against him. “The exit of Rajan is proof that the government is siding with those industrialists who have looted the banks and do not want to repay the money,” he said. He said the state-owned Gujarat State Petroleum Corporation, which had taken loans when Narendra Modi was the state Chief Minister, owes the banks Rs 20,000 crore. Jairam Ramesh alleged that the RBI Governor’s decision to not opt for a second term showed that those who owed banks a lot of money approached BJP chief, Amit Shah and the RSS to put pressure on the RBI Governor. The Modi government, which has “good relations” with trade and industry, also did not want to turn them away, he claimed.
