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Monday, Sep 16, 2002

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FDI alone no good?

FDI up to 100 per cent in petroleum and banking is uncalled for and not in the interest of economy.

The foreign investor throws his hat in the ring in good times and in hard times abandons it. A case in point is Enron. Dollars add to the foreign exchange reserves against which rupees are released for unproductive purposes. The excess liquidity gets compounded.

If at all FDI is to be invited it should be for specific new or additional capacity generating projects in power, communication and technology sectors. There is no advantage in handing over the existing institutions to FII through FDI.

S. Srinivasa Rao

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