The Hindu Business Line : Fresh Left pressure on FDI cap hike

PUTTING fresh pressure on the Government to drop the proposal to raise the banking FDI cap to 74 per cent and lifting the voting rights cap, left parties on Tuesday sent a communication asking it not to give effect to the proposals through the notification route.

In a detailed communication, four Left parties including CPI(M), CPI, RSP and Forward Bloc, have called for a debate in Parliament over the issues. "Any effort to bypass the Parliament, by adopting the notification route invoking Section 4 of Banking Regulation Act, will be met with opposition," the parties have said in their note sent to the Government.

The Left has said the proposed moves would not only further deregulate the financial sector but would also enhance the "vulnerability of the financial system to the flows of speculative capital."

The parties have said that the Government should instead concentrate on measures to improve the efficiency of the banking system within the existing regulatory framework.

The note has pointed out that by proposing the increase in the FDI cap, the Government has also disregarded the views of RBI, which had expressed its reservation on such moves.

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