New booklet to be released next week says it will accelerate jobless growth and inequality.
The Swadeshi Jagran Manch (SJM), the economic wing of the Rashtriya Swayamsevak Sangh (RSS), is set to launch a scathing attack against the Union government through a booklet to be released later this week lambasting its Foreign Direct Investment (FDI) policy.
The booklet — FDI se bikas: Kahan le jaiga yeh rasta [Development through FDI: Where will the road lead us] — has severely criticised BJP-led government’s attempt to open up the markets indiscriminately to foreign investors in nine sectors, last June. The 110-page booklet has referred from French economist Thomas Piketty’s international bestseller on inequality, Capital in the Twenty-First Century, to indicate how the FDI may ruin an economy.
Besides the SJM, other units of RSS like the Bharatiya Mazdoor Sangh, Bharatiya Kisan Sangh, as well as experts and activists have come together to bash the ruling party for opening up sectors to FDI “without any consultation”. Four of 15 writers of the booklet are national co-conveners of SJM.
Noted economist and SJM co-convener Bhagwati Prakash Sharma said the changes were “likely to lead to an overwhelming control of foreign investors” which would destabilise domestically-owned capacities. On June 20, the government opened up nine sectors, including defence and civil aviation to 100 per cent FDI, or nearly as much, with government’s or automatic approval route.
No increase in income
Another SJM co-convener and economist Kashmiri Lal felt the FDI would not increase income or bring in more capital or encourage healthy competition.
“Perhaps new thoughts are emerging from foreign tours and perhaps it may not be a good idea to stick to old ones. But was not it reasonable to take people into confidence before implementing this new thought…before taking a u-turn on FDI and update [people] through a White Paper?” Mr. Lal asked. “When a party is in power it opens up to foreign investments…[but] being in the Opposition, the same party opposes such investment,” points Ashwini Mahajan of the SJM.
Another co-convener, Dhanpat Ram Agarwal, an expert on Intellectual Property Rights, also flagged the “U-turn”. “The stand of the then NDA government [in 2001] was that the ‘Singapore Issues’ on investment…[on] transparency in government procurements and competition [Trade Facilitation having been accepted in the 9th Ministerial Conference at Bali] will be against our national interest,” he noted.
‘Singapore Issues’ refer to the ideas championed by WTO in 1996 Singapore conference, where business facilitation through transparency in government procurement, regulations and competition was pushed.