By IANS
New Delhi : The Communist Party of India-Marxist (CPI-M) Thursday criticised the government’s decision to relax norms for foreign direct investment in crucial sectors, including petroleum refineries, and asked it not to proceed with the move.
The CPI-M, which along with three other Left parties, supports Prime Minister Manmohan Singh’s government from outside, said that the cabinet decision was against the UPA (United Progressive Alliance) government’s mutually agreed agenda of governance.
“The National Common Minimum Programme of the UPA government says that FDI should be encouraged (only) in the areas of infrastructure, high technology and exports. The FDI policy review undertaken by the cabinet does not reflect such an approach,” the CPI-M politburo said in a statement.
“The politburo is opposed to these moves and calls upon the UPA government not to proceed further with such decisions,” it said.
The cabinet on Wednesday approved further relaxation in the norms for FDI in various sectors, threw open new areas such as commodity exchanges, credit information and aircraft maintenance for overseas investors while hiking the ceiling for investment in public sector oil refineries.
The politburo statement pointed out that the decision to raise the foreign equity cap from 26 to 49 percent in state-owned petroleum refining units would lead to further disinvestments of the public sector units.
Pointing out that the condition for a compulsory disinvestments by a foreign partner of 26 percent stake to its Indian partner in petroleum trading and marketing companies had been removed, the statement said: “The CPI-M is strongly opposed to these policy moves, which seek to enhance the presence of foreign companies in the strategic petroleum and natural gas sector. The government should reconsider this decision.”
Terming the decision to allow up to 40 percent FDI in foreign institutional investors (FII) in commodity exchange as “unwarranted”, the statement alleged that the government seemed to be “impervious” to the opinion across the political spectrum that the liberalisation of commodity exchanges was not in the interest of maintaining price stability.
The communists also slammed the decision to allow 100 percent FDI in titanium mining saying that it was a “retrograde” move. “Rather than strengthening the public sector in the extraction of exhaustible minerals, the government seems to be keen on privatisation and opening up of the mining sector.”
“Further liberalisation of FDI norms in cargo airlines as well as ground-handling operations also needs to be reviewed from the security aspect,” the CPI-M said.