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BJP advocates cautious liberalisation, underlines 26 pc foreign equity in insurance

The Bharatiya Janata Party today advocated cautious approach while opening up the economy to foreign investors and remained non-committal on the controversial 14 per cent equity to Non-Resident Indians proposed in the Insurance Regulatory Authority Bill.

Releasing the economic resolution adopted by the BJP national executive in J J Nagar, general secretary Govindacharya pointed out that indiscriminate opening of the Indian economy has stifled industrial growth, especially in the small scale sector.

He attacked the previous governments at the Centre, including the Congress and the United Front, for the decade-long economic stagnation.

The resolution, which had undergone some important changes from the draft on opening up the economy to give more swadeshi content to economic policy, favoured foreign direction investment should not exceed 26 per cent of equity in the insurance sector. But it remained silent on 14 per cent equity offered to NRIs in the bill which was now before the standing committee of Parliament.

Govindacharya said the resolution sticks to restricting foreign equity to upto 26 per cent.

The resolution said: "The BJP is of the opinion that foreign participation should not result in foreign monopoly and control over the insurance sector. The dominant control must be of private Indian companies." It further said that an investor should not be the single biggest shareholder in such an insurance company.

The BJP was firm that insurance companies with foreign equity must comply with all the guidelines issued to LIC and GIC from time to time and premia funds should not be allowed to go out of the country under any circumstances.

Dwelling on this, Acharya hoped that more precautions would be taken while the actual regulations are framed.

He said the executive urged the BJP-led government at the Centre to take urgent steps to streamline exports both on micro- and macro-levels to avert crisis on the foreign exchange reserves.

The executive was of the view that the imports of non-essential goods would further burden the Balance of Payments as it was not commensurate with increased exports. He emphasised the need for a balancing act to reduce non-essential imports taking into consideration the consumer needs.

The resolution called upon the government to make it "obligatory for import of consumer goods and luxury items to earn the foreign exchange needed by them through appropriate exports".

Replying to a question on the impact of economic sanctions in the post-Pokhran nuclear blasts scenario, Acharya claimed the fundamentals of the economy were so strong that the sanctions did not affect the economy. In this connection, he spoke about the possibility of lifting the economic sanctions by the western countries.

The resolution urged that the government at the Centre should give priority -- in terms of resource mobilisation and urgency -- to the prime minister's special scheme of a 7000-km national expressway as this would be an effective strategy to generate employment and create demand.

It surged the government to give top-most priority to rural development, economic empowerment of youth and women, drinking water, primary education, basic health and shelter for the poor.

The nine-point economic programme enunciated in the resolution also emphasised the need for strengthening the small-scale sector and cottage industry through adequate policy initiatives and additional support.

The national executive urged the government to evolve a consensus among major political parties on key economic issues. "This is all the more necessary to further strengthen and protect country's economic sovereignty."

On the long-term perspective, the executive directed the government to shortlist economic priorites to manageable areas within available resources.

The resolution said that the government should initiate further steps to rapidly enhance power production to meet emerging and future demands.

The nine-point programme also included intensive pro-poor employment generation schemes. It highlighted that schemes should be launched in a planned manner to benefit the largest number of the poorest of the poor.

The stability of prices of essential commodities, an efficient public distribution system, speedy disinvestment of government stake in public sector undertakings and release of huge funds blocked in PSUs for investment in social and infrastructure sectors were also highlighted.

UNI

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