Tamil Nadu Chief Minister J Jayalalithaa on Saturday upped the ante against the Centre's recent policy moves, stating, "The UPA government is unfazed by the sufferings of the common people, small traders and small farmers. The UPA's latest FDI flag is diversionary -- more to anesthetise the mammoth corruption charges against the UPA government especially when elections seem imminent."
"The Cabinet's approval on these issues, toting these as big ticket reforms which would accelerate unprecedented growth and boost a sagging economy, is premature," she said.
"Increasing FDI from 26 per cent to 49 per cent in the insurance sector and opening up FDI up to 26 per cent in pension funds will be operational only if the relevant bills viz. Pension Fund Regulatory & Development Authority Bill, 2011, and Insurance Law (Amendment) Bill, 2008, are passed by both the Houses of Parliament where the UPA faces a number crunch," she said.
"26 per cent FDI in the insurance sector was permitted, but nothing appreciable has come out of it. Hiking it to 49 per cent against a Parliamentary Committee recommendation will prove disastrous. As to whether they
have the right to jeopardise this crucial sector is a debatable issue. Limiting the capital requirement to Rs.50 crore for insurance companies will result in the mushrooming of small companies lacking experience and capability and will be fraught with danger. This will unnecessarily expose our public to the risk of uncertainty."
"Allowing FDI into pension funds and channelling the domestic savings of elderly persons into the highly risky and unpredictable capital market will place the future of senior citizens at tremendous risk," she added.
"FDI in the insurance sector will lead to the emergence and dominance of private insurance companies whose motives will be totally commercial. Consequently, the public sector insurance companies like LIC which participate actively in the developmental process will suffer. As a result, the developmental process of the nation itself will be adversely and severely affected," she said.
"This move is at best a gimmick and at worst an unworthy risk. The act of disguising harmful decisions and promoting them under the name of grand reforms amounts to deceiving the people of the country. No amount of rhetoric will change the truth. I strongly oppose these moves as they are detrimental to the future of the common people of this country," she added.