The Congress(I) led government in India is considering a 7-year lock-in for foreign companies engaged in manufacturing of power equipments. The move is aimed at keeping the non-serious players out of the picture.
The prime minister’s committee on infrastructure on power sector issues has been considering the problem and has discussed with various representatives of the Planning Commission, and finance and power ministries.
A number of critical equipments used in power generation are currently not manufactured in India. In this wake, the government had earlier opened the sector for 100% automatic foreign direct investment (FDI) route. However, keeping in mind the critical nature of the sector, the government does not want fly-by-night operators to invest in the segment.
In this wake, the power ministry has proposed a 7-year lock-in and the government is expected to come out with a notification in this regard soon. The lock-in policy, if goes through, will restrict equity sales by both the 100% Indian subsidiaries of foreign companies and joint venture operations of foreign companies with Indian partners.
We always believed that Dr. Manmohan Singh is a great economist with a vision and interest to elevate India into the ranks of Developed Countries. However, his laidback attitude in controlling parallel black money and speculation in Real Estate which led to the rise in NPLs of Indian Banks makes us think twice the calliber of this Old Man heading India. Real Estate in India was driven by fly-by-night operators and the Government was a mere spectator. If they have the will, they should impose a blanket ban of 10-years lock in for Foreign Money in Indian Real Estate – but the real question – who is bothered about the Aam Aadmi ?