New Delhi: Sangh Parivar-affiliate Swadeshi Jagran Manch has called Arun Jaitley’s Budget 2016-17 “retrograde” and said it will approach the government to reconsider the decision to abolish the Foreign Investment Promotion Board (FIPB).
SJM co-convenor Ashwani Mahajan said the budget on a whole was “much below expectations” and pointed to what he called insufficient allocations for education and health sectors.
“The whole world, from the US to UK, is getting disillusioned with globalization but this government has not been able to come out of the idea of globalization. FIPB has been instrumental in controlling and managing foreign direct investment (FD) in sectors where there are serious concerns,” he told News18.
Incidentally, SJM leaders had met Jaitley a few days ago with their recommendations for the budget. SJM leaders said that if those demands were included, the Budget would have “made India great again,” a slogan reminiscent of Donald Trump’s protectionist campaign during the US presidential polls.
Among their demands were to “take a cue from Trump” and impose restrictions on Chinese imports besides clamping down on foreign institutional investors (FIIs).
Mahajan wondered what the rationale for scrapping the FIPB was.
“They (foreign investors) come with a few dollars and take away our well-established companies. FII and FDI take away much more than they bring. In one particular year one of them brought $30 billion and took away $36 billion as royalty.
For SJM, all FDI is bad. But FIPB was there for a reason from the point of view of government policy,” he said.
Finance Minister Arun Jaitley had earlier said that a new FDI policy in the offing will give details of the new regime to replace FIPB.
Mahajan said there should have been more clarity on what replaces FIPB given the security concerns.
“What measure has the government taken to protect concerns regarding security when projects get cleared through the automatic route?” Mahajan asked, hoping that the government will roll back the decision and “good sense prevails.”
Mahajan said the reasons why India aggressively wooed FDI are not applicable anymore.
“We have had a foreign payments crisis, that is why government was going for FDI and FII. Now when the government is saying the current account deficit in the first six months of this fiscal year has only been 0.3% of the GDP, which is down from 1%, this decision of the government does not make any sense. The government can rethink about this,” he said.
Mahajan said there was a ray of hope in the budget in the allocation for rural India.
“It has record expenditure and has a NABARD dairy fund corpus of Rs 8,000 crore. Though it has nothing on warehousing and cold storage. As a result of lack of this facility farmers are not getting remunerative prices. There is compulsion to sell their products in the absence of warehousing and storage and are not empowered enough to withhold and keep the products in cold storage, as it is a costly affair,” said Mahajan.