Chief Minister J Jayalalithaa on Tuesday charged the Congress-led UPA government with ignoring the interests of the poor and middle classes by hiking the FDI caps in key sectors.
Giving a detailed account on the impact of the decision to raise FDI cap in vital sectors, the Chief Minister in a statement here, said raising the FDI cap was neither an effective nor an appropriate measure to tackle the macro-economic imbalances faced by the country.
“Investors are shying away from India because of the poor governance record of the UPA government, its notoriety for corruption and scams and its inability to improve the investor environment in the country,” Jayalalithaa pointed out.
Referring to the increase in the FDI cap for telecom sector from 74 per cent to 100 per cent, she said “Perhaps, this move will only benefit the foreign companies which have reportedly incurred losses on account of the orders of the SC in the issue of 2G licenses. Even advanced countries restrict foreign investment in the telecom sector for security reasons, whereas the Centre seems to be oblivious of these concerns,” the Chief Minister pointed out.
On raising the FDI cap in insurance sector, Jayalalithaa said the public sector insurers had been providing very good service. She recalled that Tamil Nadu’s flagship scheme, the Chief Minister’s Comprehensive Health Insurance Scheme and the Government employees’ Health Insurance Scheme were being operated successfully through public sector insurance firms.
The Centre appears keen to repeat in the insurance sector the scenario in the telecom and aviation sectors where private operators have been given a virtual free ride. “This has forced the PSUs into a loss-making situation,” she observed.
Regarding the increase in the FDI cap in plantation sector up to 49 per cent on the automatic route and up to 100 per cent with Foreign Investment Promotion Board, she said “Since Tamil Nadu has a large number of small tea growers, we cannot allow FDI in this sector to tip the scales in favour of the larger plantations and jeopardize the livelihood of the small growers.”
Speaking on the increase in the cap on FDI in single brand retail, she said decisions in this area should be made subject to the clearance of the State, so that the small retail trade which provides livelihood to millions of small traders could be effectively protected, said said.