FDI hike in insurance will hit economy, says CPI leader

The government''s decision to allow the percentage of Foreign Direct Investment (FDI) in the insurance sector to 76 per cent from 49 per cent, will badly hit the economy, according to Communist Party of India Member of Parliament Gurudas Dasgupta.

He said that the move would lead to takeover by foreign players of the Indian business by the foreign players and there would be no guarantee for the security and safety of the hard earned money of the Indian customers. The FDI hike would results in more profits to the foreign investors and their profits would be Indian customers'' losses.

The impact of U.S. economic meltdown was not felt in the banking as well as insurance sectors in India because a majority of them were with the government. If the government did not reverse the move there was every possibility of the Indian economy facing the risk.

The FDI even in the retail sector was allowed to be increased to 76 per cent, said Mr.Dasgupta, who is also the general secretary of the AITUC.

source: livemint.com