Is the FDI hike in 13 key sectors including defence and telecom a mark of the UPA's desperation to steady the rocky economy before going in for the national polls in 2014? CNBC TV18's economic policy editor and Delhi bureau chief Siddharth Zarabi joined IBNLive readers for an interaction on the issue.
Q. As long as when they were not hiking the limit, media was saying, he cant take a decision, when they have taken, we say is it out of desperation. Government of the day cannot run on advise from media...and opposition. Asked by: S ESHWAR
A. True, but the government also has a responsibility to listen to people's views.
Q. Is it too little too late for the UPA? The sentiment inside and outside of India is that there is a policy paralysis in the Current Govt and there is no warranty for the money invested in India, eg. Telenor and SSTL. What say? Asked by: Karthik
A. It is not a question of too little or too late. it is about coherent decision making.
Q. Will it have any impact of rupee? In your view, where it is headed for? Asked by: Abhishek Anand
A. No immediate impact on the rupee, but in the long term if dollar inflows improve through higher FDI, then it will help send a positive signal for the INR
Q. Does the latest FDI hike need the backing of investor-friendly rules to bring about a substantial positive impact? To what extent? Asked by: Sourav Pattanayak
A. Absolutely it does. That is the biggest requirement.
Q. Do you think the new FDI measures will have meaningful impact in the sector? In which sectors the impact will be more visible Asked by: Abhishek Anand
A. Telecom should be among the first beneficiaries. Some other sectors will also benefit, but perhaps not in the immediate term
Q. Will 100 percent FDI in telecom sector lead to more snooping by other countries? Also will they share information with Indian agencies? Asked by: EM
A. You raise a valid point. There is NEED for enhanced security of all our telecom and IT networks, regardless of levels of foreign investment allowed.
Q. Will it not mean compromising on key issues like security? Also, does this auger well for Indian employment in the long run? Asked by: Kumar
A. There should be no compromise on security issues - and security is needed irrespective of foreign investment.
Q. Will these measures have any negative impact on Indian economy? Asked by: Praneeth
A. No. I do not think so. Negative impact in manner do you mean?
Q. I remember FDI in retail passed more than 10 months ago. Still it has not attracted any players. Your thoughts on how much time would it take to make a meaningful impact of this FDI hike (if at all) on the economy? Asked by: Mehul Shah
A. That's a very good question. You are right in pointing out the retail example. It is clear that any investment decisions will take their own time. Investors will not rush in to please India, they will come for purely business reasons.
Q. After doing almost nothing for 9 years and spending money carelessly, is it right of the govt to allow FDI in major sectors just before elections? Why is it that the media has not highlighted the drawbacks of these FDI? Asked by: EM
A. Economic decision making cannot and should not be hostage to politics. And the government of the day should have been faster to take decisions in a calibrated manner.
Q. Is the FDI hike will set UPA to call early elections? Asked by: Jagannath Pujar
A. The fact that elections are upon us is well known. Obviosuly, a government with very little to show for in terms of economic performance will try all steps to shore up perception - both locally and overseas.
Q. How this control the outflow of Indian money to Foreign countries as they are not interested to invest in India due to many issues related to Government? Asked by: Praneeth
A. The reversal of portfolio investment is a result of foreign investors seeking better returns in home markets and elsewhere. In that sense, FDI has nothing to do with that.
Q. 100 percent FDI? Oh! God! Sooner we will forget the word swades and only FDI will be heard louder. Surely this will have negative impact on our economy in long run. Local suppliers will be gone and we need to depend on each and everything from other nations which will in turn bring down the economy and 1 dollar will be 100 rupees. Asked by: Sri Kumar
A. I hear your comment.
Q. What ever it may be compulsion I think FDI hike is good for India? Asked by: Prathap
A. I hear your comment.
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