Congress and the CPI(M) criticised Modi decision to relax its foreign equity

New Delhi, June 20 (IANS) The Congress and the CPI(M) on Monday criticised the Narendra Modi government's decision to relax its foreign equity norms further, notably in defence, aviation, pharmaceuticals and retailing sectors, saying it was a "panic reaction and won't solve the basic problem".

Interestingly, the BJP's labour wing -- Bharatiya Mazdoor Sangh -- also opposed the decision and said that defence and aviation need not be opened for Foreign Direct Investment (FDI).

"Today's (Monday) announcement on the FDI is a panic reaction. It is a reaction to show to the world that it's business as usual even as (RBI Governor) Raghuram Rajan has announced his exit (on the completion of his term in September)," senior Congress leader Jairam Ramesh told the media here.

"This government and the Bharatiya Janata Party has always opposed the FDI. It is ironical that the BJP is today claiming FDI to be the answer to all of India's economic problems. Domestic investment is far more important than the FDI and we are not going to be able to solve India's problems with FDI," he added.

Communist Party of India-Marxist general secretary Sitaram Yechury said at a press conference here that the government's decision to allow more FDI in certain areas will not solve the country's economic problem.

"At a time when the Indian capital is flowing out at a rate which is greater than the inflow of capital in India, the government is trying to tide over it by allowing more FDI. But that is not going to solve the basic problem," he said.

The Left leader said that the government's decision to allow increased FDI in defence was surprising.

"Very few governments across the world allow FDI in defence as it may impact national security," Yechury added.

The Bharatiya Mazdoor Sangh too expressed apprehensions, saying it was not for FDI in areas such as defence and aviation.

It said the FDI was not doing any good to the country's economy.