Amartya Sen advises fresh look at FDI

A detailed unbiased scrutiny is necessary regarding foreign direct investment (FDI), thinks thinks eminent economist Amartya Sen.

The views and analysis relating to FDI are often based pre-existing views and a general conclusion of its effect is not possible, he noted in his speech at the Press Club, Kolkata, today.

"There is a need of minutely analysing the effects of FDI in a country and the economic rationale behind it and it is not correct to look for a general consensus of whether FDI should be allowed or protested," said Sen.

There are complex matters relating to trade policy like patent law which needs greater scrutiny, noted Sen. China has made great progress thanks to huge FDI.

"FDI in some sense is not a value in itself and an economy cannot solely depend on it for progress," he added.

Agriculture performance depends greatly on the quality of labour involved in the activity, and not on factors like land, fertility, fertilisers and irrigation, he said.

Failure in delivering proper basic education and healthcare acted as a constraint on agricultural performance.

"Agricultural policy and land reforms are necessary but what is equally important is proper delivery of healthcare and education which significantly influences the quality of labour," said Sen.

Micro credit facility was another major area of concern for overall performance of the agricultural sector and the rural population, Sen said.

The economic and social costs of subsidies, Sen said, could be justified only if it went to the poor without fail.

"Major emphasis should be given on the proper delivery of the subsidy. Government needs to see if the poor are really getting the benefit or not," he added.