chaps.’ A correspondent told him they came in under bilateral arrangements. But Dr. Singh said in an open environment, they would have to compete. ‘It will be good for BHEL to compete and earn its living by being cost and quality efficient’.
On the entire gamut of foreign investment, Dr. Singh said three routes were open to them namely 51 per cent equity in 34 high priority industries eligible for automatic approval, 51 per cent foreign equity in trading houses and anything outside it to be approved by the Government. It was in the fourth category, though not mentioned per se in the policy, the Empowered Board would discuss with big companies abroad and consider their proposals on a case by case basis. Dr. Singh said, ‘You can’t operate the economy rigidly. It has to be transparent as there are areas about which neither of us know and it would be better to negotiate.’ There was unease among businessmen in Hong Kong about their fate once the island rejoined China. ‘Now if the MNCs want to come here, we would be willing to look at them.’
Foreign banking: Asked about the reported violation by Pepsi, he said, ‘Let us not create unnecessary scare. India is not a small country and this excessive fear of foreigners might have been okay at the time of Independence. But in the last 40 years the country has created a new class of entrepreneurs, new confidence, new technical/managerial skill and therefore this foreign bashing is not good for the morality of Indians.’ He said, ‘Look at Singapore, it has thousands of MNCs but when the Singapore Government sometime back expelled
Wall Street Journal
and
Time
magazine, the US swallowed it. It is the lack of self-confidence which is not justified here.’
As for the rationale behind increasing FERA limit from 40 per cent to 51 per cent, he said, ‘If we are really in the game of getting foreign investment and technology, then we will have to address ourselves to the legitimate fear of foreign investors about possible leakage of technology and their consequential demand for management control. I do not see anything wrong in it.’ This fear was perhaps the reason for India not getting top technology in the past. Further, he felt the country today was in a different ball game especially in a situation where capital was scarce and a new entrant like Soviet Union [was] offering 100 per cent foreign equity.
In a significant observation, he said that though present rules did not allow 100 per cent foreign equity outside EOUs and Foreign Trade Zone, the Special Empowered Board may consider even such cases if latest technology could be brought to India in the national interest. While the Government has allowed automatic clearance for CG imports up to the value of Rs. 2 crores because of tight foreign exchange position, this limit could be raised and eventually abolished if the BoP position showed substantial improvement. Dr. Manmohan Singh said 70 per cent of the cases came under this category.
However, the most interesting part of the press conference was provided by Mr. Vijay Bhaskar [
sic
] Reddy who announced that provisions in theMRTP Act relating to unfair/restrictive trade practices would now be extended to even the public and cooperative sector. Since existing law did not have such a provision, he was informed that he had made a policy announcement while Parliament was in session. Immediately, his deputy, Mr.Rangarajan Kumaramangalam corrected his senior to say, ‘The MRTP Act does not cover public sector and we are examining where it can be changed without destroying the harmonious relation between consumers and the Act.’ As for the assets criterion, he said though his Ministry would now be concerned with only post-entry rather than pre-entry problems of the MRTP companies, alegislation would be introduced to abolish chapters 3 and 3A which covered the asset limit, dominance, acquisition and mergers.
What about privatisation and disinvestment of public sector
On the entire gamut of foreign investment, Dr. Singh said three routes were open to them namely 51 per cent equity in 34 high priority industries eligible for automatic approval, 51 per cent foreign equity in trading houses and anything outside it to be approved by the Government. It was in the fourth category, though not mentioned per se in the policy, the Empowered Board would discuss with big companies abroad and consider their proposals on a case by case basis. Dr. Singh said, ‘You can’t operate the economy rigidly. It has to be transparent as there are areas about which neither of us know and it would be better to negotiate.’ There was unease among businessmen in Hong Kong about their fate once the island rejoined China. ‘Now if the MNCs want to come here, we would be willing to look at them.’
Foreign banking: Asked about the reported violation by Pepsi, he said, ‘Let us not create unnecessary scare. India is not a small country and this excessive fear of foreigners might have been okay at the time of Independence. But in the last 40 years the country has created a new class of entrepreneurs, new confidence, new technical/managerial skill and therefore this foreign bashing is not good for the morality of Indians.’ He said, ‘Look at Singapore, it has thousands of MNCs but when the Singapore Government sometime back expelled
Wall Street Journal
and
Time
magazine, the US swallowed it. It is the lack of self-confidence which is not justified here.’
As for the rationale behind increasing FERA limit from 40 per cent to 51 per cent, he said, ‘If we are really in the game of getting foreign investment and technology, then we will have to address ourselves to the legitimate fear of foreign investors about possible leakage of technology and their consequential demand for management control. I do not see anything wrong in it.’ This fear was perhaps the reason for India not getting top technology in the past. Further, he felt the country today was in a different ball game especially in a situation where capital was scarce and a new entrant like Soviet Union [was] offering 100 per cent foreign equity.
In a significant observation, he said that though present rules did not allow 100 per cent foreign equity outside EOUs and Foreign Trade Zone, the Special Empowered Board may consider even such cases if latest technology could be brought to India in the national interest. While the Government has allowed automatic clearance for CG imports up to the value of Rs. 2 crores because of tight foreign exchange position, this limit could be raised and eventually abolished if the BoP position showed substantial improvement. Dr. Manmohan Singh said 70 per cent of the cases came under this category.
However, the most interesting part of the press conference was provided by Mr. Vijay Bhaskar [
sic
] Reddy who announced that provisions in theMRTP Act relating to unfair/restrictive trade practices would now be extended to even the public and cooperative sector. Since existing law did not have such a provision, he was informed that he had made a policy announcement while Parliament was in session. Immediately, his deputy, Mr.Rangarajan Kumaramangalam corrected his senior to say, ‘The MRTP Act does not cover public sector and we are examining where it can be changed without destroying the harmonious relation between consumers and the Act.’ As for the assets criterion, he said though his Ministry would now be concerned with only post-entry rather than pre-entry problems of the MRTP companies, alegislation would be introduced to abolish chapters 3 and 3A which covered the asset limit, dominance, acquisition and mergers.
What about privatisation and disinvestment of public sector
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