Accusing the UPA government of "heaping hardships on people," Tamil Nadu Chief Minister J Jayalalithaa on Tuesday flayed its "knee-jerk" reaction of increasing FDI cap in different sectors and warned that its "insensitivity" towards people will take its toll soon.
"The FDI relaxation announced by the Government of India is neither an effective nor an appropriate measure to tackle the macro-economic imbalances faced by the country. Much more has to be done by way of policy initiatives to promote exports and to set right the current account imbalances," she said.
She criticised the UPA government for relaxing FDI limit in sectors including telecom and charged the Centre with "acting at the behest of foreign interests and some external agencies."
The Cabinet Committee on Economic Affairs' recent approval of raising FDI limit was a "weak bid to show some pretence of a policy response to an adverse economic situation," she said in a statement.
"These measures raise a number of serious concerns. Far from protecting the interests of workers and the common people of the country, the UPA Government appears to be acting at the behest of foreign interests and some external Rating Agencies which are frequently threatening to lower the sovereign rating to Junk Status and thereby cowing down the weak UPA Government at the Centre, making it bend to its whims and fancies," she charged.
The decision also raised serious security and related concerns, which she alleged "have been totally ignored" and said the adverse impact on domestic industry, including on Central Public Sector Enterprises and employment has not been factored in.
On the increase in FDI cap in telecom sector from 74 per cent to 100 per cent, she said the move had implicit security concerns since foreign firms will be able to control the "entire telecom network."
She said data security and privacy issues will arise and will be difficult to regulate. Without naming any particular company, she said in a recent case a private service private service provider had put individual privacy ahead of national security.