Insurance FDI: BJP unsure of response

Claiming that it was not opposed to FDI "per se", the BJP on Thursday refrained from committing its unconditional support to the government's decision to grant legislative backing to 49 per cent FDI in insurance and FDI in pension fund management. "We are not opposed to FDI per se, but we have to see the fine prints as there are many issues of concerns that need to be addressed," said party spokesperson Prakash Javadekar.

The party leadership, which has decided to oppose FDI in retail, had stressed its commitment to economic reforms during its three-day national conclave last week. While justifying its opposition to FDI in retail, the party leadership had said that it was not opposed to FDI in principle and would welcome it in other sectors subject to relevant safeguards. In fact, on Tuesday, BJP president Nitin Gadkari said that FDI was needed in many sectors. "FDI has stopped coming into the country. Whatever had come is going back. Indian industry is taking its investment out of the country. The atmosphere in the country is not friendly for industrial investment. The nation has to be made friendly to capital investment in industry. FDI in various sectors has to be brought in the country," Gadkari said while speaking on 'Politics of Development' during a function organised by party's youth wing on Tuesday.

However, the party appeared fumbling on Thursday's decisions and sought to divert its direct response saying that the Congress was trying to "divert people's attention from corruption" and was acting under "foreign pressure".

"The Congress was opposed to 49 per cent FDI in insurance sector when it was mooted by the then finance minister Yashwant Sinha about 10 years ago. Now, the Congress has changed its stand despite the fact that the Standing Committee of Parliament had unanimously decided for 26 per cent FDI only. This change in position is happening under foreign pressure," Javadekar said. "The issue is how much real FDI we are going to attract. We have been able to attract only about $ 1.5 billion in the last 10 years in this sector with 26 per cent cap in insurance. But many foreign firms have already invested through convertible debentures or other instruments and these investments will only get converted into equity after this decision."

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