FDI relaxation to mitigate CAD not wise, says Rahul Bajaj

FDI relaxation to mitigate CAD not wise, says Rahul Bajaj

While the Centre is on a relaxation spree with regard to foreign direct investment (FDI) in various sectors in the hope that the inflows would help reign in the burgeoning current account deficit (CAD), it is not the ideal way to deal with the problem, according to industrialist Rahul Bajaj.

“FDI should be brought for the right reasons. Now, because of the CAD, if you (the Centre) want FDI, then I don't agree with that. The best way is to increase exports. For 10 years, all these governments have been following wrong policies,” he told reporters on the sidelines of the national council meeting of the Confederation of Indian Industry (CII) here on Friday.

He also said that the weakening of the rupee against the dollar should not necessarily cause alarm as it helps exports and discourages unnecessary imports, though costs of oil and gold go up. He however voiced concern on currency volatility that affects business and said, “We should try to avoid volatility.”

On the controversy surrounding the Jet-Etihad deal and the bilateral air services agreement between India and UAE (Abu Dhabi), and relaxation in FDI norms in various sectors, he said the impression that is created is that there is a difference within the government. “They should speak in one voice, if anything requires Cabinet approval, it should be done and nobody should go against it.”

While the defence minister A K Antony disagreed with the commerce minister Anand Sharma on raising the FDI limit from 26 per cent to 49 per cent in defence and called it a “retrograde step,” the controversy involving the aviation deals forced the PMO to intervene and clarify.

Manufacturing to propel K’taka :CM

To give a fillip to the manufacturing sector in the State, the Karnataka government is keen on establishing a series of manufacturing zones at Tumkur, Kolar and Gulbarga, out of which the one at Tumkur has already been approved by the Centre, said CM K Siddaramaiah.

“The government of India has granted approval to establish National Investment Manufacturing Zone (NIMZ) in about 12,000 acre near Tumkur. We are also trying to get approval for two more NIMZs at Gulbarga and Kolar,” he said .