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Increased FDI share in insurance will hit economy
The government’s decision to allow the percentage of Foreign Direct Investment (FDI) in the insurance sector from 49 per cent to 76 per cent, will hit the economy very badly, according to Communist Party of India Member of Parliament Gurudas Dasgupta.
The move, he said, would lead to takeover of the Indian insurance business by foreign players and there would be no guarantee for the security and safety of the hard earned money of the Indian customers. The increased FDI share would facilitate more profits to the foreign investors. Their profits would be Indian customers’ losses and their opportunities would mean the country’s increased exposure to the kind of risks they had brought in, in their financial sector.
The effect of the U.S. economic meltdown was not felt in the banking and insurance sectors in India because a majority of them were with the government, that too because of the public pressure, particularly from the Left parties. If the government did not reverse the move there was every possibility of the Indian economy facing the risk.
Even in the retail sector, the FDI was allowed to be increased to 76 per cent, said Mr.Dasgupta, who is also the general secretary of the AITUC.
He attributed the continuous pressure from the World Bank and the American establishment, to which India had moved closer thanks to the nuclear deal, as the reasons for the decision.
Mr. Dasgupta wanted to know about the fate of a Bill, approved by the Cabinet, for extending the “gratuity coverage” to various sections of employees, including teachers of private schools.
News Published Under: Banking and Finance, FDI, Real Estate India | No Comments »