The FDI cliff
- April 23 campaign roundup: AAP leader Somnath Bharti thrashed by alleged BJP supporters in Varanasi
- Stakes high for BJP, Congress as 11 states go to polls tomorrow; A Raja, Milind Deora in fray
- Arvind Kejriwal beats Narendra Modi in Time magazine's poll of most influential people
- Priyanka Vadra rakes up snooping row to target Narendra Modi
- IPL 7: All-round Jadeja steals show in CSK win
This winter session of Parliament will see many variations on the theme of foreign direct investment. Right after the vote on FDI in retail, Parliament is expected to debate foreign investment in the pension sector, the insurance sector and the banking sector. To call it a foreign investment cliff would not be an overstatement. And this is without even counting matters like hiking foreign investment in defence production. The chief reason for this overload is that the executive and the legislature have not been able to see eye-to-eye on such crucial legislation for years. The damage, as Ratan Tata has pointed out in his interview to this paper, makes investment retreat to more hospitable territories.
The theme of all the measures pending in Parliament is broadly the same — the sectors have the potential to attract investments, but political anxieties about allowing investment from abroad have stymied it. This obstruction has only helped entrenched interest groups to prosper. It also becomes impossible to develop an investment climate that can be sustained only from within the country. But these issues did not come up during the debate on FDI in retail, and are unlikely to be dissected in the discussions over the forthcoming bills. An IMF data series on global coordinated direct investment shows, for instance, that foreigners accounted for $201 billion of enterprise money in the Indian economy at the end of 2011. At the same time, Indian investment in the rest of the world is nearly $63 billion. These numbers show the extent to which the domestic economy is integrated with the world. Trying to keep retail or insurance out of these mutual flows will not be possible.
- Fencing of Shakti Mills complete, PWD tells HC
- Muslim bodies urge voters to defeat ‘non-secular forces’
- Gandhis looted the nation: Modi
- Meagre pay, stress fuelling aggression in drivers: Gurgaon transport official
- North corpn orders probe against senior official after complaint by colleague
- Malfunctioning traffic light not repaired despite complaints