Resolution-1 (Kurukshetra Rashtriya Sabha)
June 08, 2020
Swadeshi Jagran Manch
13th National Assembly
Kurukshetra (Haryana) - 12-14 Nov. 2016
Scrap New FDI Policy and Publish White Paper on FDI
Government of India has announced consolidated FDI Policy effective from June 07, 2016 under its major policy thrust of “Make in India” immediately after completion of two years of Modi led NDA government at the centre. The avowed objective as stated in the Policy Document is to attract and promote FDI in order to supplement domestic capital, technology and skills for accelerated economic growth. Departing from the earlier practice of allowing FDI in different sectors and not allowing in others to protect the domestic sector(s), now the government has declared its policy of permitting FDI in all sectors, barring a few prohibited sectors. It is unfortunate that now investment by MNCs has been allowed in several sectors including Retail Trade, Animal Husbandry, Defence, Food Products, Generic Pharmaceuticals, Security Agencies, E-Commerce and practically every sector whether as direct investment in Greenfield projects or through take over/merger by way of brownfield investment and more so upto 100%, except few cases with either Government approvals or through the Automation Route. FDI in the Agricultural sector and the Plantation sector where 100% FDI automation route is allowed for Floriculture Pisciculture cultivation of vegetables, Production of seeds, Animal husbandry are allowed to the MNCs to make monopoly gain and control. The plantation sector include, coffee, Rubber, Cardamom, Palm oil tree and olive oil tree. This means that any MNCs can come to India and acquire our agricultural land for growing vegetables, plantation and for Animal husbandry which means breeding of any kind of animals including dogs. All other sectors are sensitive but the Govt of India seems to be insensitive to the common man. The MNCs will be granted legal rights to file cases against Government of India in the international court, though various agencies including Multilateral Investment Guarantee Association (MIGA) for any kind of deviation in the policy framework which is a direct attack on our sovereignty for which many EU countries are already raising their voice for the recently concluded EU-Canada Comprehensive Economic Cooperation Agreement.
Besides the announcement of the said FDI policy, the Govt. of India is also likely to sign several bilateral and regional Free Trade Agreements (FTAs) allowing unbridled rights to the MNCs including several concessions for direct and indirect taxes. The overall view of these policies is to compromise with our agriculture, our retail sector or Defence and financial services sector which will have long term negative impact on our economic sovereignty and self- reliance, our unemployment and it will create volatility in our entire capital market and the foreign exchange rate. The domestic industry especially our MSME Sector will be severely affected due to adverse competition from MNCs. The growing adverse impact on our culture and national security will destabilise our political and socio economic fabric and also lead to large outflow of our foreign exchange in the form of Royalty, Dividends, technical fees.
Recent studies show that FDI does not always result in a new factory, research facility or office building to create new jobs, but engages it in transfer of intangible assets (IPR) for the purpose of lowering its Corporate taxes and for earning monopoly profits through patent and Brand value. India will remain net importer of capital. There is therefore an immediate need for complete reversal of the FDI policy in the larger national interest and SJM demand for Govt. of India to publish a White Paper on the FDI inflow in the past 25 years since 1991 and its impact on the overall economic health of the country and till that time there should be a complete embargo on the implementation of the said FDI Policy which is suicidal.