Letters: Investment poser

Your front-page report “Now, Obama says India must reform” (July 16) emphasises that US investors are looking for opportunities to invest in India in a manner that will create jobs in both countries.

India needs huge investments in physical and social infrastructure and the US and other developed countries have large pension and other such funds that are in need of reasonably safe and remunerative investment opportunities all over the world — for this the biggest potential market (both for low base and demographic reasons) is India. So, “developed-country” investments in India are a win-win proposition all around. Where, then, is the problem?

One problem is that Vodafone and other such investors are hoping to escape (and are strongly lobbying to avoid) legitimate taxes on the basis of technicalities — with industrialists like Rahul Bajaj openly pleading the repeal of all anti-avoidance rules! One hopes the Centre will turn a deaf ear to such pleas.

Foreign direct investment (FDI) in multi-brand retail will, no doubt, help farmers earn more without consumers having to pay more. Moreover, unlike in the current situation, people working in the supply chain will get provident fund, medical, leave and other benefits, and the Centre and states will get the much-needed taxes. The powers and earnings of the middlemen and their cash contributions to local politicians (who are the most vociferous opponents of FDI in retail) will be reduced. But should we really hand over full control of the biggest potential market in the world to foreigners just because they can invest large amounts. Or, should we limit FDI in multi-brand retail to an absolute maximum of 49 per cent and maybe much less?

Alok Sarkar Kolkata

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