People's Democracy

Stop Mortgaging the Economy

The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement on July 17.

THE UPA government is out to mortgage the economy to foreign capital. The raising of the FDI cap in certain sectors and allowing FDI through the automatic route in some others are desperate measures being adopted by the government faced with mounting economic difficulties.

The CPI(M) is opposed to the 100 per cent FDI in the basic and cellular services in the telecom sector. The decision to allow foreign capital beyond 26 per cent in defence production is fraught with serious implications. This will open the way for foreign control of the vital defence production sector.

This bankrupt policy of the government is motivated by the need to attract more foreign capital flows to meet the widening current account deficit. But the supine attitude of the government to foreign capital is only going to lead to further flow of profits and resources out of the country. Already the government has given up the claim on the capital gains tax which the Vodafone has to pay. The government is proposing to dilute the norms for investment in multi-brand retail which is going to adversely affect domestic industry.

The proposal to increase FDI in the insurance sector has to be adopted through a legislation in parliament. The CPI(M) and other opposition parties should thwart this move in parliament.

The Polit Bureau demands that the government not proceed with these FDI proposals.