ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Deteriorating Balance of Payments

The Indian economy needs t o overcome its abject dependence on foreign finance.

Vodafone seems to have friends in high places – two distinguished lawyers, one the union minister of law and justice, who is also the minister of communications and information technology, and the other, the union minister of finance. How else can one subvert a law without challenging it in a court of law? The two worthies, Kapil Sibal and P Chidambaram, have justified conciliation in the Rs 11,200 crore valid tax demand on Vodafone in the cause of promoting foreign direct investment (FDI). Why is the government bending backwards to appease foreign investors such as Vodafone?

More recently, Chidambaram, together with his counterpart in the Ministry of Commerce and Industry Anand Sharma, and with the support of Prime Minister Manmohan Singh, is pushing the case for a significant hike of the permissible upper limits of FDI in a whole host of businesses, from armaments production to telecom, banking, pensions and insurance, even a further hike in the upper limit for multi-brand retail. A committee headed by the economic affairs secretary, Arvind Mayaram, duly obliged by recommending what his boss wants, just like the Parthasarathi Shome panel had done in its recommendations on “general anti-avoidance rules”.

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