FDI

With the advent of the Modi government in power there is a concerted rightwing offensive fueled by the corporate-Hindutva forces. There is a growing onslaught on the people through the imposition of neo-liberal policies which is going to adversely impact the livelihood of the people. There is no respite for the people from price rise, unemployment and corruption. ..... The Modi government’s patronage of the RSS and its outfits is aimed at communalising the educational, social and cultural institutions. ........ The Left parties decided to conduct a week long protest campaign between December 8 to 14, 2014

The Central Committee called upon the entire Party to conduct a campaign on the following issues: (i) against FDI in railways, insurance and defence production; (ii) against disinvestment in public sector shares; and (iii) against dilution of labour laws.....The party will take up a political and ideological campaign against the offensive of the Hindutva forces and all forms of communalism and the efforts to communalise the education system and text books.

During the nearly two months of the Narendra Modi government, it has become clear that the government will adopt policies for the benefit of big business and international finance capital. The direction of the Union Budget for 2014-15 is to provide concessions to the corporates and the upper classes at the expense of the poorer sections. It is a trajectory for significant privatization of the economy through large-scale sale of public sector shares and greater reliance on public-private partnership. The fiscal deficit will be reined in only by expenditure cuts and squeezing the people further.

Consequent to the harmful decision to allow 51 per cent FDI in multi-brand retail, the government has diluted even the limited norms set out for foreign retail investment. Under the pressure of the United States, the requirement of 30 per cent sourcing from domestic small and medium industries, the requirement for back up investment and the condition that FDI in retail be allowed in cities of over 10 lakh population have been eased.

This bankrupt policy of the government is motivated by the need to attract more foreign capital flows to meet the widening current account deficit. But the supine attitude of the government to foreign capital is only going to lead to further flow of profits and resources out of the country.

The decision to allow FDI in pension funds will jeopardize the savings of millions of employees in the country.The Polit Bureau appeals to the people to oppose these anti-people measures. The PB also appeals to political parties to defeat these measures when they are brought before parliament.

That the government is bent upon promoting FDI in retail at the cost of domestic interests is clear from the dilution of the conditions set for FDI in single-brand retail. Earlier, the rule was that for FDI above 51 per cent in single brand retail, there was a mandatory sourcing of at least 30 per cent of the value of products sold from Indian “small industries/village and cottage industries”. Now this has been diluted. It is stated that instead of mandatory sourcing it is “preferably” from small and medium enterprises etc. Further, the definition of small industries has also been done away with.

The Bill will provide the legal backing for putting the pension funds into the stock market. This neo-liberal measure is being undertaken despite the pension funds in Western countries being badly hit by the 2008 financial crisis. Many employees found their pension benefits being sharply curtailed.

Allowing industrial houses to own banks would allow them to corner bulk of the credit for their own businesses through connected lending. It will be impossible to assess risks and regulate the banking sector in such a scenario. Moreover, it will further the concentration of financial power and political influence. It is for these reasons that many countries, including the United States, prohibit industrial houses from operating banks. South Korea prohibited industrial houses from promoting new banks following the financial crisis in 1997.

The Polit Bureau of the Communist Party of India (Marxist) expresses its strong disapproval of the unjustified concessions given to MNCs to set up new units in the same field of business without approval of their Indian partners. The announcement made by the Department of Industrial Policy and Promotion even allows MNCs to change their Indian partner unilaterally.