Does BJP know the difference between FDI and FII ?

Highlights of the Press briefing Held at 1615 Hours 05.08.2014

Shri Anand Sharma addressed the media today.

Shri Anand Sharma said for the last few days there is a topical subject which is part of the political narrative and that is the Insurance Bill and the position taken by the Congress party and most of the opposition parties. Things have been said by the government which has presented their version and a picture which is not entirely correct. The Insurance Bill which will also be amending the IRDA Act was first introduced by the UPA government in 2008. Thereafter, the Bill was referred to the Standing Committee of Parliament – the Finance Committee is with Lok Sabha and the Chairman of the Standing Committee was Shri Yashwant Sinha. They made number of suggestions and also in principle shown red flat for a number of proposals including raising the FDI limits. Between 2008 and 2011 and when the Standing Committee forwarded its recommendations and in 2013 where 86 amendments were incorporated and the Bill was reintroduced, I would like to add here that the UPA had introduced the Bill in the Rajya Sabha because the Bill that is introduced in the Council of States i.e. Rajya Sabha remains alive and that has given definitely the benefit to the BJP government that the Bill was alive to be taken up.

There have been developments. 11 new amendments – two of which we feel are substantive. The other opposition parties have raised some issues which need clarification to give them more comfort to proceed with the discussion and the passage. One substantive change which they have brought about since the Finance Minister said yesterday and the government, it is very strange the language that has been conveyed as if we went as petitioners to the government. It was disrespectful expression that we have given them three options – take it or leave it. This smacks of arrogance and they should show some grace and humility while engaging with the opposition. I don’t want to join issues. We can speak the same I shall not as I have never done it. The substantive of change that they brought about fundamentally changes the definition of FDI. FDI policy came in 1996. It has evolved more sectors opening up and the route and sectoral cap changing. Many of changes were done last year when I had the responsibility. The definition is there in the FDI Policy document. Insurance is a sensitive sector. FDI means that it’s tangible investment, solid investment coming in a particular sector for business purposes and when a sectoral cap is there, the issue of ownership and control comes in which means even if you go up to 49%, the ownership and control which is very clearly defined. There were two definitions earlier and even now for that matter, one is of the companies, second is the definition under the FDI so that there is clarity on what we do mean by Indian ownership and control. The change that has happened is that the BJP has proposed portfolio investment as part of FDI. This is a sensitive sector, we are unique to deepen the access to insurance and enhance coverage for the benefit of the poor people also farmers and those who have been for historical reasons not part of the financial inclusion and need that coverage. It was but correct for the combined opposition to urge the government to refer these changes in the Bill to a Select Committee. The Select Committee is not a Standing Committee. Select Committee is the committee of the concerned House which works in a time bound manner and gives its report. Thereafter the House takes up the Bill for consideration. The Congress party is saying and going along with all other opposition parties for a reference to the Select Committee has been misrepresented by the government. Reference to Select Committee is not per se opposition. There is a process of the enactment of law and statutes in Indian parliament. If there was no justification for the setting up a of a Select Committee under Rule 70, Rule 69 of Rajya Sabha, then the Rule book is rendered redundant. As I said Select Committee functions in a time bound manner, gives its recommendations. Reference to Select Committee does not mean taking a confrontationist position. That I must clarify. It was we, we brought this Bill, we have been in favour of raising the FDI to 49% but it does not mean that we should have a situation where parliamentary processes are bye passed, curtailed and where much needed clarity is required particularly with substantive changes. That privilege of Parliament and the House is defined to the House in which the Bill is introduced and is the property of the House once the Bill is introduced, it is the property of the House and is not the property of the government. After the Select Committee, we will take a view.  I must say that why the government is not accepting a very reasonable request of the opposition and projecting this as a confrontation. It is the government which is actually confrontationist on this issue. There is no stand off if the government were to accept what is reasonable and what is correct. I would like to tell you that the Lokpal Bill was passed by the Lok Sabha and it came to Rajya Sabha and the opposition parties including the leader and the Finance Minister who was the leader of opposition then, they wanted that Bill as passed by Lok Sabha to be referred to a Select Committee of Rajya Sabha. That went to Select Committee and in a time bound manner came back and the Lokpal Bill was passed. I am just reminding the government that the change of seat should not mean a complete loss of memory or a change of approach. Sometimes they need to be reminded as to where they were. We have been deeply pained over some expressions yesterday which are unacceptable. To attribute to the Congress that we are against reforms, against development and acting against national interest, those who did not allow this Bill and other legislations to be taken up for six years are not the ones to teach the Indian National Congress where India’s national interest lies. We are not being confrontationist. The other legislation which we have supported and few other Bills which the government is bringing including the SEBI the
Congress party is supporting, so we are not indulging in partisan politics or agenda. This was effectively done to the detriment of the country and functioning of the parliament by BJP throughout the tenure of UPA-II and most of the tenure of UPA-I and I would like to put this record straight. Both the Houses are in session. Today anything good that is happening is being said that it is because of the change and when if you get less rain in Delhi, it is the legacy of the previous government, if the crop is good, the credit must go to the Narendra Modi Ji and the BJP, if something goes wrong, if there is a flood, if there is a natural disaster, then it is the legacy of the UPA. They must stop it now. They are in office, they have been voted in as a government, they should be responsible in what they say and what they do. I would like to tell the government.

Also with regard to the issues which have been discussed and debated in parliament, I have been reading about it and so are you. The parliament is functioning more, the comparative charts of how many are discussion, how many issues have been raised and the government must thank us. If parliament is functioning if there are debates and discussions, it is because of us not because of the government. If we were to follow their path, it would have been a different story.

On the question of the Insurance Bill in light of yesterday’s Finance Minister’s statement in the House, Shri Sharma said it is the government’s view that the Congress can write or we write and give it to them. It is true that the Finance Minister did say this to me. The meeting was an informal one. As a parliamentarian I respect the parliament’s rules, procedures and conventions. You cannot function in an arbitrary manner. The government telling principal opposition that you draft it and we will accept it. The Bill is the property of the Rajya Sabha. Rajya Sabha has a rule book.  Select Committee provision is there in the Rule Book. Therefore, the correct place where the amendment should come from or clarification should come from should be in the Select Committee. I cannot do in my study and hand it over; it is not a private affair.

On the question of BJP telling that Congress wanted changes, Shri Sharma said the changes can only be made by the House Committee. Individual parties cannot make changes to a Bill which is the property and now part of the legislative process under way.

With regard to the statement made by Shri Arun Jaitley in this connection, Shri Sharma said in fact we defined FDI and it was never our Bill nor our proposal to bring in FII and portfolio investments and without any cap in the 49%. That is the issue. Why are they in desperate hurry? Can I ask this question? They could happily wait for six years, now they can’t give few weeks to the Select Committee. The government must explain why they are in great hurry. Heavens will not open up. No earth shaking developments took place. Arun Jatilay Ji should remember his own words and his party’s attitude, we are not paying back in the same coin but they don’t have any patience and they expected us to be patient for six years which we were.

Shri Sharma also added we just want and the other opposition parties need clarity. Therefore, it is but legitimate to consider the demand of the opposition to have a Select Committee look into the changes and recommend it to the House.

On the possibility of a joint session or an ordinance route, Shri Sharma said ordinance route is something which authoritarian regime happily embraces but here there is a Bill pending before the House. Where the Bill is pending before the House, it cannot be brought. Some people need to be educated about parliament process and procedure. Secondly, a joint session can only be called when one House has passed it and the other House has rejected it. When it is still under consideration of a House, I think they have veteran leader who know the procedure, they should share the rule book that have made this statement.

To a question that why does’nt the Congress vote against the Bill as stated by the Finance Minister, Shri Sharma said we have never said we are voting against the Bill. You are bringing in change which needs to be looked into by the Select Committee. We are not a party which will ignore that the other smaller parties in the opposition are also saying is the right of the House to constitute a Select Committee. Why are they objecting to it? That should be my question.

The government has also made a statement today in the Lok Sabha and another statement will be made definitely in the Rajya Sabha in a few minutes by the Minister of State for Commerce & Industry on the WTO.

Yesterday the Finance Minister in his interview had said “that we are in favour of the trade facilitation agreement, we have always been in favour when the issue was of food security. Ms. Nirmala Seetharaman’s statement says more or less the same. The statement conceals more and reveals less. If you carefully go through the statement, is a laborious exercise to confuse people. This was a meeting of the officials in Geneva and not a Ministerial Summit. The 9th Ministerial Summit of the Economy and Trade Ministers took place in Bali in Indonesia in Dec 2013 where finally after hard bargaining an understanding was reached, the first Ministerial agreement ever since the establishment of the WTO was in Bali in 2013, almost 19 years after the Uruguan completed and the WTO was established. The Bali package has not been explained by this government. It has ten agreements – four agreements are specific to the LDC there is a LDC package for the least developed countries. There is an agreement on trade facilitation and there was an agreement on the elements of agriculture which was forced on the agenda. They were never part of the agenda being discussed earlier in Geneva in Dec 2013 but it was India who spearheaded the proposal of G-33, it was India’s charge. US, EU, developed countries opposed India’s move in Bali. Many of you are aware; just revisit your own archives. China broke ranks and joined with the developed countries and that was the challenge when India was threatened in words with isolation. India was not isolated. India put together a grand coalition of 83 countries of Asia, Africa and Latin America. India stood firm. Issue was procurement from subsistence farmers, marginal farmers of food grains of public stock holding for food security purposes. That was secured, the rights were protected and we made a statement in Bali. That was achieved in Bali. That is a Ministerial agreement which has the sovereign signatures of the participating countries.I must tell you. This was not a new issue which was being discussed as is being made out to be. The issue of public procurement emanates from the flawed agreement called Uruguay Round Agreement. If you go by my plenary statement in Bali, I had said it is a flawed agreement, inherently flawed, unfair and loaded against the developing and poor countries and we rejected. These dated rules must change because we were held to ransom to external reference prices for the calculation of de-minimus. Now the de-minimus is calculated for what is your right because the WTO does not bar any country from procurement of food grains. It is only when it is at administered price, it is taken as market support. That was tied to the external referenced prices of 1986 to 1988. It was India which forced them to move to 21st century India and India was offered peace clause for two years which we rejected and finally the meeting got extended, we won. So this pubic stock holding issue was secured protected and making it clear that was not something under negotiations in Geneva. When it comes to food security which this government is tom-toming about, let me make it again clear. Food security has never been a part of the WTO agenda. Food Security we made it clear in Bali is the sovereign and sovereign space which has never been ceded and shall never be ceded. There was no food security battle. Third what which with the impasse now,  we have achieved is a deviating it does not mean that you have to wait until then but until a permanent solution is put in place, no country shall challenge a Member country for the breach of de-minimus.

It was all signed, sealed in Bali. What we have achieved to my worry is the goodwill that we have earned has been squandered. We got a package for the least developed countries which included a duty free tariff free market access, which India gave on the eve of the India Africa Summit in April 2008. India got it in Bali for them. The three agreements were achieved in Bali. If there is unraveling of the Bali package, and least developed countries that is why big countries broke ranks with India. Those big countries that stood by India in Bali and prevented any isolation of India from Egypt to Nigeria to Brazil, Ethopia and other big countries. Ghana, Kenya, it is a long list. All these countries broke ranks with India in Geneva. India was left in the company of three countries. India’s isolation is painful. The rest I say when the statement is made. They confused everyone because there was no linkage, time line was defined Please pick up the document of Bali. Your rights were fully protected. What India should have done was to give a work programme for an accelerated movement on a permanent solution on public stock holding not linking to TFA – Trade Facilitation Agreement. I was amused and astonished both when I saw the interview of the Finance Minister saying that he and his government strongly supportive the TFA as it will benefit India. Please pick up the Rajya Sabha debate of 19th Dec where he said and questioned the TFA and I have to satisfy him that it is in India’s interest. I had also to satisfy him that we have got a permanent solution. It was in the same debate he referred to WTO as bazaar. What is the need? Today WTO is the multi lateral trade organization and we ever since the Doha round started have been fighting for a multi lateral agreement which is there, balanced, which corrects the distortions of the past loaded against the poor and developing countries and puts in place a rule based system to govern global trade. India in Bali protected the centrality of the WTO. Today that centrality has been threatened because they are bye passed movements called the pluri-laterals. So once these go and with the Bali package, the state in which we have left it, it is a matter of concern.

To another question whether the Congress is satisfied on the UPSC issue,   Shri Sharma said I think most of the parties are not satisfied. It is a question of level playing field and similar treatment to all Indian languages. I think that is the real issue.



(Tom Vadakkan)


Communication Deptt.   

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