Taking a dim view of the UPA government’s push to attract more foreign direct investment in key sectors, the BJP on Wednesday described the decision to raise the ceiling in telecom and insurance as a “panic reaction” a time when the economy was going downhill.

“The panic decision taken by the government on FDI is not going to impact the Indian economy, which is indeed in a terminal state,” BJP deputy leader in the Rajya Sabha Ravi Shankar Prasad told journalists here.

“The story of India has come under a cloud under the leadership of UPA chairperson Sonia Gandhi and Prime Minister Manmohan Singh.”

“FDI in the telecom sector has been increased from 74 to 100 per cent. Seventy-four per cent is a dominant investment. If at 74 per cent India is not able to get foreign investment, how can one expect this at 100 per cent,” Mr. Prasad wondered.

He wondered if the FDI decision was a fallout of Finance Minister P. Chidambaram’s recent visit to the U.S.

Mr. Prasad said the issue of allowing 49 per cent FDI in insurance was with the Parliamentary Standing Committee, and an understanding was reached — the Congress was also a party to it — that the limit should be 26 per cent. “Then why was this panic reaction?”

Mr. Prasad said these measures would not bring in FDI. Stating that the economy was in a bad shape and even Indian investors were not putting their money here, he wondered why foreign investors would do so.

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