January 13, 2005

Press Statement

The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:

On Attitude to Foreign Capital

The decision of the UPA government to scrap Press Note 18 is an unwarranted step giving in to the pressure of multinational companies. As per the announcement made by the Prime Minister in Kolkata, in joint ventures the interests of Indian companies cannot be protected  vis-à-vis the foreign partner. The rationale for this decision that foreign direct investments are being hampered by the Press Note 18 is untenable. While welcoming FDI, it is incumbent upon the government to see that the interests of domestic industry are protected.

Yet another instance of the government’s undue sensitivity to the whims of international finance capital was displayed when the RBI Governor made a eminently reasonable suggestion that foreign institutional investors should be taxed. Such FII flows come into the country purely for speculative purposes and are the main  cause for the volatility of the market. The promptness with which the Finance Minister has rejected the suggestion displays an unreasonable eagerness to appease foreign financial speculators who have no commitment whatsoever to the country’s economy and well being.