New Delhi: BJP on Wednesday decried the government decision to increase FDI cap in telecom and insurance sectors, dubbing it as 'panic reaction' at a time when the economy is going downhill and sought to know if it was a 'fallout' of Finance Minister P. Chidambaram's US visit. 
"The panic decision taken by the government on FDI is not going to impact the Indian economy which is indeed in a terminal state. The story of India has come under a serious cloud under the leadership of Sonia Gandhi and Prime Minister Manmohan Singh," BJP Deputy Leader in Rajya Sabha Ravi Shankar Prasad told reporters.
The party predicted that these measures are not going to prove successful in bringing FDI to the country. It also raised eyebrows about the UPA depending heavily on FDI to save the economy and asked if it has no other solution.
"FDI in telecom sector has been increased from 74 per cent to 100 per cent. 74 per cent is a dominant investment. If at 74 per cent India is not able to get foreign investment then how can one expect this at 100 per cent," Prasad said.
He said that the Indian economy is in a bad shape and when even the Indian investors are not putting their money here, why will the foreign investors invest their dollars.
Prasad asked Chidambaram if this step is a fallout of his visit to the US where, the BJP alleged, he was 'reprimanded' for the problems with the Indian economy.
"His roadshow in Japan was a complete failure. Why is this government making the economy only FDI driven?" he said.
The main opposition maintained that the reasons behind the slowdown in the economy are stinking corruption, crisis of credibility, lack of transparency and state of uncertainty.
On the issue of allowing 49 per cent FDI in the insurance sector, BJP said the matter is already with the Parliamentary Standing Committees and an understanding had been reached- in which Congress was also a party- that the limit should be 26 per cent. "Then why this panic reaction," Prasad said.
UPA govt's decision on FDI taken under western influence
Nagpur: Opposition BJP termed the Centre's big-ticket reforms push to hike foreign direct investment in at least a dozen sectors as a 'hasty' decision taken under the 'influence' of developed western nations.
"The UPA government's decision is taken in a haste and under pressure from developed western countries. BJP will examine merit of each and every proposal," BJP spokesperson Prakash Javadekar said here. He was referring to UPA government's decision to liberalise FDI limits in several areas, including allowing 100 per cent foreign investment in telecom and higher limits in defence manufacturing.
"At a time when ill-governance is prevalent and its credibility is under question, UPA government has brought FDI in important sectors," he said. Javadekar said the government ignored national security aspects while approving the decision. "In the defence sector, we have to ensure that we get access to latest technology otherwise junk material will be dumped here," he said.
Opposing raising of FDI cap to 49 per cent from 26 per cent in insurance sector, the BJP leader said foreign insurance companies have 'miserably failed' in India.
"At the time of opening of the sector previously, estimated inflow of USD 12 billion was expected in the country but the actual inflow turned out to be USD 1.2 billion. It is unjust to enhance FDI from 26 per cent to 49 per cent in this sector," Javadekar said. 
Next: Industry gives thumbs-up to govt's FDI decisions

Industry gives thumbs-up to govt's FDI decisions
New Delhi: Government's decisions to relax limits for FDI in a dozen sectors are 'most timely' and will boost investor sentiments, India Inc said on Wednesday.
"While industry looks forward to more, this revision of caps is a huge step in setting off these reforms," CII Director General Chandrajit Banerjee said in a statement.
On hike in FDI limit to 49 per cent for the insurance sector, the chamber said the move would unshackle insurance industry and drive orderly growth and long-term development of the insurance and pension sector in the country.
On defence sector, CII said that "critical concepts such as 'state-of-the-art' technology would need to be defined".
"Clarity and transparency needs to be ensured while allowing higher FDI," Banerjee added.
Assocham said the 'welcome move' should be followed by easy rules on the mergers and acquisitions so that much needed consolidation in the insurance sector is facilitated.
It said the decision to allow 100 per cent FDI in telecom will surely help the sector as it will lead to some over seas investors taking interests in the existing debt ridden telecom companies.
FICCI said that it "welcomes the announcements for raising FDI caps" in telecom and insurance sectors and for enabling the possibility in defence.
"What India needs are JVs that enhance its strategic capabilities like 'Brahmos' which has catapulted India to the group of nations with supersonic cruise missile capabilities, with IPRs residing within the country giving it export potential," FICCI President Naina Lal Kidwai said.
"It is the transfer of ‘Know Why’ that is crucial in an alliance ensuring that the technology transfer has empowered India’s defence capabilities," Kidwai said.
KPMG (India) Partner-telecom Jaideep Ghosh said the new norm on telecommunication segment, announced yesterday by Commerce and Industry Minister Anand Sharma, is a positive step towards economic growth, especially in the current depressed situation.
"The timing is appropriate. This is expected to boost investor sentiments and address the prevailing current account deficit," Ghosh said.
CII said the industry has given thumbs-up to fast-tracking of FDI in PSU oil refineries, commodity bourses, power exchanges, stock exchanges and clearing corporations under automatic route.
Further, industry bodies are looking forward to Government's decision on FDI limits in sectors like civil aviation, construction and real estate, information and broadcasting and media, banks and multi-brand retail.
The government on Tuesday announced to further liberalise FDI norms and caps in about dozen sectors.