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Saturday, 04 January 2014 01:10
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Yashwant Sinha telling FDI retailers to wait till BJP comes to power suggests India is a banana republic

Till now, one of the best thing about India was that, no matter which government came to power, it respected the policies taken by the previous one. And with good reason. Policies, especially those that have been legislated, don’t belong to any one party, they belong to the government. So, if a party doesn’t agree with its predecessor’s policies, it needs to move an amendment in Parliament. And whatever investments have taken place under the old policy are protected, or grandfathered to use the technical term.

Which is why it comes as a rude shock to see former finance minister Yashwant Sinha telling foreign retailers that they would do well to wait before investing in India given that the BJP’s policies are anti-FDI. What Singh seems to be forgetting is that the policy was actually put to vote by the government and, like it or not, the BJP and its supporters were not able to muster the necessary support to defeat the motion. In that sense, FDI in retail is a policy that has been passed by Parliament.

And even if it wasn’t, if every politician is going to threaten to overturn the government’s policies, who is going to invest in India, including Indians themselves? A good example in this context is the privatising of Hindustan Zinc (HZL) by the BJP. In this case, the issue being raised now is whether this was legal since it should have been passed by Parliament as HZL was created by an Act of Parliament. By that yardstick, the UPA is within its rights to cancel the deal. What would Sinha have to say if it did?

 

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