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Pune Speak Up: The choo choo train of FDI

Friday, 8 August 2014 - 10:25am IST | Place: Pune | Agency: DNA
FDI in defence has been hiked to 49% from present 26% and the cash starved railways has thrown open its doors in areas of infrastructure such as high-speed train systems, suburban corridors and freight projects. Dna asks experts if the cabinets decision in opening defence and railways for FDI a step forward with the economic reforms and development

Both decisions have been long overdue...
In the defence sector, there are a host of critical, but non-offensive items that are regularly purchased abroad at an exorbitant cost. It would go a long way to encourage these companies to now bring their technology to India and invest here. It will also help reduce the influence of brokers and middlemen, giving the defence services the best options to buy locally without compromising on quality. For now, we must keep this in balance only with non-offensive material. With railways, while we boast of the world's largest rail network, its quality and its load carry capacity is woefully inadequate and antiquated. It will take time to upgrade the technology and the huge networks that spread into every corner of India. It will also call for a huge outlay to put the necessary equipment and rolling stock into place. After a "no-can-do" budget, these are two decisions which could make a difference to the country in terms of FDI inflow and employment in the long term.
Zubin Kabraji, Regional Director (Pune), Indo-German Chamber of Commerce

Use public investment in some sectors...
Bringing more FDI in defence and opening railway sector for infrastructure development is a step forward. The UPA government had faced difficulties bringing in the same but the NDA has pushed it through in the name of bringing in investment for development of these segments. I am not totally against FDI, if it is generating employment. It should not generate newer ways of making black money. The government should put efforts in generating investments from internal resources of the country. There are many sources of tax collection which the government is either neglecting or leaving untapped. In our country there is dead investment like gold, which can be used for development projects. In a way we are allowing foreign sources to govern our economic progress. For a sector like defence we should never allow FDI, because it is a question of our national security. Public investment is the right resource for some segments.
Subhash Vare, Secretary, SM Joshi Socialist Foundation

India can only benefit from these reforms...
I completely accept the proposed reforms in FDI in the military sector, because India has a vast defence requirement out of which 70% is being met by import and only 30% is our own production, that too of relatively in smaller value. This leaves our military forces at the mercy of suppliers. India has had bad experiences regarding this in the past. In situations such as the Kargil War, India was held at ransom, figuratively speaking. One more important benefit of allowing 49% FDI in the defence sector would be the lowering the military budget. It also might lead to the possibility of exporting surplus defence equipment in the future. The opening up of railway infrastructure segment, like high-speed trains, for foreign investment is a good move, as it would lead to faster completion of railway projects, especially in sensitive areas like Kashmir and the North-East.
Lt. Gen. (Retd.) DB Shekatkar

It is a step in the right direction...
India is the largest importer of military equipment in the world, and imports account for 70% of India's defence requirements. Even the procurement of defence equipment is a long winded and bureaucratic process, further complicated by corruption. The world is a global village and FDI is the order of the day to not only decrease India's dependance on foreign suppliers but also to boost our own defence industry simultaneously. So I think that the ideal situation should be to raise the FDI cap to 100%, done in a way that is not detrimental to India's national interests. Ultimately, these big foreign companies would have to invest huge amounts in India and thus must be offered attractive terms and the chance to export any surplus defence equipment. The opening up of the railway infrastructure segment is also a step forward precisely due to the same reason.
Major Gen (retd) Shashikant Pitre

Private sector known for efficiency...
From an economic and social point of view, I think that increasing the FDI curtain to 49% in the defence sector and opening up of FDI in certain railway infrastructure segments such as high-speed train systems, suburban corridors and freight projects is a step forward in terms of development. The private sector is known for being efficient and managing their investment to ensure smooth service while maintaining profits. This would in turn help a country that is heavily dependant on imported defence equipment. There will be objections from unions, but that would mainly be because of less political influence which would not suit them. On a larger scale though, a carefully managed FDI would go a long way in freeing up industrial funds.
DVR Rao Citizen activist




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