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Red carpet to MNCs, foreign investors fails to bring inflows

The Indian government's policy of according a red-carpet reception to multinational corporations and foreign investors have failed to bring in any appreciable inflows during 1991-2000, according to a University Grants Commission-sponsored research report.

The report was released at a press conference in Jaipur by its author, former Rajasthan University Vice-Chancellor P Omprakash.

''As against the proposed outlay of about Rs 8,000 billion under India's Eighth Five-Year Plan (April 1,1992 to March 31, 1997), the actual inflow of foreign direct investment, or FDI, during the five corresponding calendar years (1992-1996) was only Rs 206 billion, that is just about 2.5 per cent of the financial resources required,'' the report said.

Omprakash, a noted economist and principle investigator, took four years to complete the study on 'Foreign investment and multinational corporations in India since 1991'.

In pursuance of the liberalisation policy, there has been little by way of 'transfer of technology'. The MNCs preferred to set up 100 per cent subsidiaries that was unfortunately supported by the centre.

The policy benefited the country in two sectors only: automobile and information technology. Even then, progress in IT was the country's own making, he said.

Asked whether the globalisation initiated by the P V Narasimha Rao government was wrong, Omprakash said, "I don't want to get into any controversy."

Calling for a change in attitudes, he said mere installation of computers at the residence of the prime minister or chief minister to receive the people's complaints would not serve any purpose unless the grievances were looked into.

The high ratio of poverty prevailing in the country should have been kept in mind while switching over to liberalisation. There has also been no debate before adopting this policy about which the people should have been informed.

Answering a question, he said subsidies cannot go with capitalism if it is to be pursued.

Omprakash claimed that an equivalent or even half of the quantum of efforts to promote domestic savings could have been far more rewarding in making available a greater amount of financial resources for developmental activities at the same time providing a sense of self respect to the citizens as a whole.

The extent of competition in the Indian economy in general, has actually been reduced on account of the usual policy of the MNCs to take over or elbow out their Indian competitors even when the domestic entrepreneurs have performed far better than their foreign counterparts.

In many cases, the common people have had to pay unjustifiably higher prices for food, beverages, medicines and other items including consumer durables, he added.

UNI

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