The Thapar committee report on foreign investment seems to have opened up a Pandora's box: While Assocham president H L Somany has struck an anti-MNC stand, a former chamber president who helped write the report says the country can't be moving backwards on the road to liberalisation.
This development comes a day after M K Sharma, a member of the committee that prepared the report and HLL director, distanced himself from the exercise, claiming that the report was doctored after approval by the committee members.
The Thapar report had recommended a cap of 40 per cent on foreign investments in the consumer goods sector and dilution of stake by the 100 per cent MNC subsidiaries in a time-bound manner. Sharma had claimed none of this was ever discussed by the members.
Somany admitted that some changes were made in the "draft" report which was sent to the finance ministry in a tearing "hurry" since the government wanted the chamber's views at the earliest to finalise its policy on foreign investment.
Somany said the chamber will not be cowed down by the dictates of the multinationals. "No decision will be taken (in the chamber) on the basis of pressure from any particular group," he said.
He admitted that certain "changes might have been made in the report in the last moment", but said he did not remember the points that were changed. "Whatever was done was done in good faith," Somany said. He had earlier said that the contents of the report were unanimously adopted by the members of the committee.
He said MNCs have every right "to be or not to be a member of Assocham". "This is a democratic country...we have democracy in Assocham...and democracy will prevail here. The MNCs have a right to express their views but one must remember that the MNCs are a part of India and they must obey the laws of the country. Everything in Assocham will be finalised by the majority," Somany said.
"If they (the MNCs) have problems let them go to the government. Let the government decide," Somany said. "But everybody has some objection or the other. What kind of objections do the MNCs have in Indonesia?" Somany asked.
"I am an Indian. I have to work in the national interest. Should we leave our court of nationalism?" he asked. "The MNCs have not given this job (Assocham president's) to me. All the members of Assocham, which also includes the MNCs, have elected me to this post," Somany said clarifying that the chamber did not stand for the concerns of a section of the industry but for the interest of the Indian industry.
The former chamber president who did not want to be named, however, does not share Somany's view. Asked whether such a report would adversely affect the nation's economic plans and prompt second thoughts in the minds of foreign investors, the ex-chief said: "Foreign investors will go to places that are most attractive to them, where they feel they can get the best deal."
The policy, he said, should keep benefit the consumer most, implying that if this policy is implemented, it may not be in the consumer's best interests.
The former chief dismissed the discontent brewing in Assocham, saying that in any organisation, all differences are ultimately thrashed out into a common view. Assocham secretary general V Raghuraman said in Hyderabad the panel had only attempted to formulate guidelines on equity position on automatic approvals and underlined the need to ensure that direct investments are transparent.
