|Chennai||Rs. 27580.00 (0.18%)|
|Mumbai||Rs. 28700.00 (0%)|
|Delhi||Rs. 27700.00 (0.73%)|
|Kolkata||Rs. 28270.00 (0%)|
|Kerala||Rs. 27050.00 (0.74%)|
|Bangalore||Rs. 27350.00 (1.11%)|
|Hyderabad||Rs. 27660.00 (1.21%)|
In its bid to alter the perception of being anti-economic reform owing to its opposition to allowing foreign direct investment (FDI) in the country’s retail sector, the Bharatiya Janata Party has planned on a “massive” outreach exercise after the ongoing winter session of Parliament.
The country’s main Opposition party says the economy faces problems because of wrong decisions taken by the Congress-led United Progressive Alliance government, and that it is keen to wrest power at the Centre for the benefit of the nation.
“We will overthrow the UPA regime (in the next general elections). Our ambition is achieving 12 per cent gross domestic product annual (GDP) growth and 10 per cent agriculture growth. The road is difficult, but it is possible,” party president Nitin Gadkari thundered at a national interactive meet organised by the BJP’s trade and industry cell.
Substantiating, he said the (BJP-ruled) Gujarat had achieved 14 per cent agriculture growth. Its GDP growth is 12 per cent, while it is 11 for Bihar (where the BJP is in alliance with the ruling JD-U). Even after so many years of independence, the (union) government is shamelessly talking about bringing FDI in retail to build cold chains and supply chain. Why did it not happen for all these years?” he asked.
Party leader Piyush Goyal sought to lend clarity to the BJP’s stand on FDI and reforms. “Just because we oppose FDI in retail doesn’t mean we oppose reform. And supporting FDI alone doesn’t mean being bullish on reform,” said Goyal, a Rajya Sabha member.
“There are a host of areas where industry and business is facing acute problems. We will organise meetings with more than 100 industrialists in Mumbai. There, we will put forward our route map for reform and elicit their views,” Goyal later told Business Standard.
As for the proposed “outreach” exercise, its meetings will be attended by industry leaders — not just under an umbrella of organisations like CII and Ficci, but also in smaller groups. The BJP will be represented by former finance minister Yashwant Sinha and former commerce minister Arun Jaitley, besides Goyal himself.
The BJP, he said, believed the issue facing the economy today is not foreign capital, but consolidation and reform of domestic laws and the policy environment. “The party’s vision of reform is that it must be in public interest and for the greater good. But, for the government, reform equals FDI — whether in banking or insurance or the rest of the economy,” Goyal said.
Jaitley, who is leader of the Opposition in the Rajya Sabha, said his party was not against all FDI. Goyal, on his part, said the party might not oppose FDI in civil aviation (26 per cent), because it would not want to see any Indian airline go under. There may not be too many investors in the sector if the cap was kept at 24 per cent, he conceded. Yet, the BJP is opposed to the new proposal for FDI in the pharma sector (100 per cent through the automatic route for new investments). Reason? India-manufactured drugs are priced lowest in the world -- and the BJP would not want prices to go up, reveals Goyal.
However clarity in FDI is not the party’s economic policy priority. “It is Indian manufacturing that is facing maximum pain. It is treading a path that represents nothing but obstacles: whether labour law or obstructive import-export policies that continue to sanctify a customs department that is inefficient and rent-seeking,” he added. The party’s priority is to force the government to overhaul laws relating to environmental clearance. And in its view, laws relating to administration and electoral funding should follow.
When asked what the government had done wrong in cancelling clearance to Lavasa (a luxury housing project that was given clearance that was later withdrawn by the Ministry of Environment), Goyal said the government objected to the project only after development started. There was also disagreement within the government on what was legal and what was not, he added. In the past, there has been a difference between what the BJP has done when in power and what it has espoused when in opposition. This is a charge that it attracts today as well. For instance, when it was in power, it supported deregulation of the Indian insurance industry but opposed foreign entry. But it was a BJP-led government that introduced IRDA Bill in 1998 (passed in 1999) deregulating the industry with up to 26 per cent foreign equity. Similarly, the BJP opposed amending patent laws to allow for product rather than process patents. But in 1998, it passed the Patents Bill instituting product rather than process patent.
The BJP opposed the Dunkel Draft of GATT to create WTO. But when it came to power, not only did it remain in WTO but moved aggressively to phase out custom duties and loosen restrictions on imports. Despite its current distaste for FDI, it did not specify the non-priority areas for FDI when it was in power. In fact, FDI was permitted in a range of areas during its reign in power, including in liquor and tobacco.
Leaders defending the party against the charge of flip flop in and out of power say there was a time for external liberalisation and a time of internal liberalisation: and the time of the latter is now.
Goyal recalled that when the BJP first liberalised insurance, it was in the hope of big bucks flowing into India.
“Do you know how much money we’ve got in the decade or so since insurance was liberalised? A measly Rs 5500 crore -- about $1 billion,” he revealed. “And what have we lost? Opaque rules by which insurance companies play, and side letters that when caps are increased to 51 per cent, the foreign investors will get their share back at almost no investment”.
The BJP believes any further increase in FDI caps in insurance should be permitted only after allowing listing in the stock market, so that the market value determines the investment.