People's Democracy

CITU Condemns Reckless Liberalisation

THE Centre of Indian Trade Unions (CITU) has condemned the mindless liberalisation of FDI limits by the union government in the defence, telecom, insurance, asset reconstruction, power exchanges, single-brand retail and various other vital and strategic sectors of the economy. The CITU said in taking these decisions the government has been totally unmindful and unconcerned about their damaging impact on the concerned industries or services and also on the whole economy and national security. Such moves are tantamount to mortgaging the economy to foreign corporates, the CITU opined.

In a statement issued from New Delhi on July 17, the CITU strongly reacted by saying that instead of addressing the problems of burgeoning current account deficit and its impact on the value of rupee at its root, and instead of taking concrete measures to contain the deficit by reversing the present economic policy regime, the government of the day has become desperate and is trying to find the means to fund the deficit at any cost and by any means, even if by putting the country’s economy into a more vicious trap, and paving the way for further outflow of profit and resources. The UPA government appears to be more anxious to prove its loyalty to the so called neo-liberal ‘reforms’ lobby than to address the problems at the root. 

Most atrocious is the manner in which the foreign direct investment (FDI) has been liberalised in the case of defence production sector --- from the present cap of 26 per cent to paving way for virtual caplessness through the Cabinet Committee of Security route. Already the public sector defence production units are under severe strain, and so are so also the ordnance factories, because of the faulty defence procurement policy of the government, and the problem is destined to multiply as the foreign players would enter this segment, with Indian companies as their junior partners. This is, besides, threatening for the national security.

Allowing 100 per cent FDI in telecom sector is also fraught with the possibility of virtual takeover of domestic private telecom sector by foreign players and is destined to invite formidable security threat to the country. Even after the exposure of the snooping operation by a US intelligence agency mainly through electronic communication system, such move of the government is going to be suicidal. Further, owing to such move, the public sector undertakings (PSUs) in the telecom sector, currently shouldering the non-remunerative responsibility of providing services in the rural and remote areas of the country, would be subjected to further loss of market share in the remunerative urban segment and would have to face the resultant financial strain.

The government is batting for raising the FDI cap in insurance sector to 49 per cent, ignoring the unanimous recommendation of parliamentary standing committee of finance which disapproved any such move. At present, the public sector insurance companies attract a substantially big part of the domestic insurance related savings and channelise them to national developmental priorities. But empowering foreign players in the country’s insurance business would rather give these foreign players with Indian partners a greater access to handle the country’s domestic savings and re-channelise them to their own priorities including speculation.

The CITU also said FDI liberalisation in other sectors like Asset reconstruction, power exchange, stock exchange etc is also going to have more negative impacts compared to the so called gains that have been presumed by the government to be accruing.

The CITU statement denounced such disastrous suicidal moves of reckless liberalisation of FDI by the government of India and called upon the working class and trade union movement to resolutely oppose these moves through a united movement in order to defend the people and the country’s economy.

DESIST FROM FDI MOVE IN

TELECOM: BSNL WORKERS

On the same day, the Forum of BSNL Unions and Associations strongly protested against the decision of the government to increase the FDI cap in telecom industry. Saying that the move was nothing short of inviting serious risks to national security, the Forum called an urgent meeting on the day to discuss the issue and plan agitation programmes.

Already 74 per cent FDI is allowed in the telecom sector, which has resulted in majority presence of foreign multinationals in some of the private telecom companies. The case of Vodafone is well known. As we know, the company did not agree to the restrictions of the government of India on many occasions and has been openly violating several of the regulatory conditions. It even refused to pay the due income tax levied on it. If 100 per cent FDI is allowed, as decided now, the Forum of BSNL Unions and Associations said many of the Indian private companies would be taken over by foreign multinationals with disastrous results for India. The snooping by a US intelligence agency through the mobile companies is now stands fully exposed and known to all. Under such circumstances, any increase in the FDI limit and giving a free hand to foreign companies in the telecom sector, which is the second line of defence, will be suicidal.

The Forum said the increase in FDI would seriously and adversely affect the growth of the Bharat Sanchar Nigam Limited (BSNL), a public sector major. Pumping of huge money into the private telecom companies and lack of funds for the PSUs --- BSNL and MTNL --- would lead to marginalisation of the latter. This in turn would be utilised by the private companies to increase the rates for calls and other telecom services on a large scale and therefore the customers would have to pay much more than today.

The Forum of BSNL Unions and Associations has expressed its strong protest against these moves and demanded that the government must desist from the move to increase the FDI limit to 100 per cent in the telecom sector, failing which the unions in the BSNL would be compelled to resort to agitations programmes.