Wednesday, June 29, 2011

India's biggest investment stuck in a quagmire of controversies.

I am sharing one of my an article which has been published in Newspaper. Hope you will enjoy it.

Governments have been taken land in very cheap prices from the framers on the name of development and sell into very highly prices to private company.

It is revolution time in India, now government sector is moving towards to catch above 9.5% GDP with the help of corporate world in India and globally. Prime Minister Dr Manmohan Singh bought the idea of privatisation in 1991 to save the economic condition of the country. The then government had privatised various industries such as oil, electricity and aviation in a bid to increase the revenue flow in the country. Since the implementation of the LPG policy, outsourcing and Foreign Direct Investments (FDI) were seen as the last resorts.

In order to improve the efficiency the government also merged with various private players for the betterment of the product. The central government is in back foot in 2G spectrum case and commonwealth games as they were held in partnership with private companies.

Meanwhile, state and central governments have been hell bent in attracting FDI’s into the country. It directly helps to generate huge amounts of revenue, employment and benefit of millions of people in the country. One of the best available examples is that, a few days ago the Japanese government had asked the West Bengal government to make a list where they could invest their money in the state. The sudden political change in Japan is not only attracting the Indian entrepreneurs but also major companies from technological hubs like Japan.

Land acquisition bill is always been debatable in the country. Firstly, the government offers land to private company on the name of development in highly undeveloped states in the country. The recent example of it is when the Indian government cleared the way of POSCO project in Orissa after suspending its decision on it for a long period of time.

The Korean company POSCO, was to get its conditional nod from the government on January 31 by the government. However, Environment minister Jairam Ramesh cleared Posco project with 60 conditions.

Conditions by environment ministry are:
  • Take shoreline protection measures.
  • Submit details marine environment conservation plan.
  • Compensation for the loss of fishing activity in the region.
  • Contribute 2 percent profits to corporate social responsibility.

The side effect of the condition in the Indian constitution there is no such rule to monitor those conditions by states and central government. Neither the ministry nor the state government has the institutional mechanism in the place to monitor those conditions. Indian government could put conditions but it has loopholes to monitor them.

Posco steel plant project is a biggest foreign investment by the Korean company in the India. Korean company Posco has plans to invest $12 billion in Orissa project.