Govt set to ease FDI rules for companies

'Indications are that the UPA government will stoop down to any level to appease the foreign investors. The UPA government has yielded to the constant lobbying by Walmart and other multinational retail giants and pressure form their home governments, especially the United States. It is reported that extraneous considerations have played a dominant role and as a result erroneous factors have weighed over legal issues and sentiment of the cross section of the society--almost all the political parties, traders’ bodies, farmers’ associations, experts and the public in general. The government is likely to have an open door policy whereby the foreign investors can enter the country without any barriers and do any kind of business without any conditions. Therefore, it is not surprising to find that let foreign investors will be allowed to subscribe to warrants and partly paid-up shares issued by companies under the automatic route in the guise of speeding up approval and facilitate faster flow of overseas funds into the economy. In reality, what the nation needs today is not FDI, but efficient and effective use of the resources of the country. If proper measures are undertaken, it would be possible to mobilise vast amount of money available with the people of the country. In the past few years fraudulent private players have raised hundreds of thousands of crores by offering high rates of interest as well as return on investment. Almost every day complaints are pouring in about large scale looting of peoples’ hard earned savings. For instance, in the past few in the western part of Tamilnadu alone (Coimbatore, Salem, Erode Namakkal and Thirupattur) nearly tow lakh crores of rupees have been fraudulently looted through phony schemes Lured by such get-rich-quick schemes such as stock market scam, commodity trading scam, gold quest scam multi-level marketing (MLM) scandal, emu farming scam, chit fund fraud, land scam, etc. people have lost lakhs of crores of rupees during the past decade or so, particularly during the past few years. Moreover, thousands of crores have been looted by the corporate sector in the form of company deposits. Had the government and RBI took serious efforts to channelise the savings of the people into productive investment, the people would not have fallen victims to such frauds and the country would have been able to moblise adequate funds for investment. In reality, what the nation needs today is not FDI, but efficient and effective use of the resources of the country. Moreover, FDI in retail is very different from FDI in high-tech sectors and infrastructure. Many people don't realise that because of misleading propaganda by the government and other votaries of FDI in retail trade. Chains like Wamart are disliked even in the US by a lot of people for their predatory strategy''

Dr.C.Murukadas, The Times of India, Oct. 17, 2012