The Hindu : National : Left says `no' to raising FDI cap

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Wednesday, Mar 21, 2007
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National

National

Left says `no' to raising FDI cap

Special Correspondent

NEW DELHI: The Left parties on Tuesday turned down a proposal from the United Progressive Alliance Government seeking to raise the foreign direct investment cap from 26 per cent to 49 per cent.

The Government put forward arguments to allow the change in the FDI cap in general insurance. It said Rs. 5,000 crore was required to revamp the sector for deeper penetration and funds were not available in the country. It said a number of foreign companies whose credibility was certified by foreign regulators were willing to enter the field. They were willing to undertake re-insurance provided they were allowed to operate in India. The Government was of the view that Indian corporates would not be willing to make this long-term investment.

The Left leaders present at the meeting sought to know how the Government came to the conclusion that Rs. 5,000 crore funds could not be raised in the country especially when the Union budget talked of the investment rate being over 32 per cent.

"How can the Government say this when the country has several people listed as billionaires with assets worth Rs. 6 lakh crores, equivalent to the budget," CPI Parliamentary Party leader Gurudas Dasgupta said after the meeting. He also disputed the Government's claim that the Indian corporates might not be ready for long-term investment.

Besides Mr. Dasgupta, the Left leaders who attended the meeting were Basudeb Acharia (CPI-M), C.K. Chandrappan (CPI) and Abani Roy (RSP). Senior Ministers present were Pranab Mukherjee, P. Chidambaram, Hansraj Bharadwaj and Oscar Fernandes.

Secretary (Banking and Insurance) Vinod Rai made the presentation.

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