As part of the current reforms, the Government is opening up a number of sectors to foreign direct investment. Hopefully this will do good to the telecom sector, but it can have an adverse impact in retail, pension funds and certain other sectors.
In telecom, we started with a 26 per cent; increased it to 51 per cent, then to 74 per cent and, prospectively, 100 per cent. The same thing may happen in civil aviation and some other sectors.
Indian companies have been going through all sorts of problems — getting spectrum licences, company registrations, foreign investment clearances, and so on. By the time they succeed, their capital is exhausted. To come out of such crises, they seek more and more FDI. These companies opt to sell some of their equity at a premium to foreign companies to raise the additional capital required.
Indian companies and their promoters are thus becoming surrogate mothers for the delivery of readymade companies, which, with proper financial nourishment, can become highly profitable. Foreign companies will thus hold higher stakes in Indian properties and will benefit by high market capitalistation and profits.
T. H. Chowdary
The inability of Kingfisher Airlines to pay salaries to its employees for the last seven months has had a telling effect on their families. The wife of a technician with the airline committed suicide.
In these days of high inflation and skyrocketing prices of essential commodities, delay of even a day or two in the disbursement of salaries adds to the employees’ woes.
The Government should immediately come to the rescue of the Kingfisher employees. It should either put pressure on the airline to clear the salary dues of employees or the Government should pay the employees and recover the amount from the airline through legal means.
K. V. Seetharamaiah