SEBI chief for exercising judicious support to FDI

The SEBI chairman said that Rs 6,300 crore was given away to promoters of Indian companies by way of preferential allotments. Out of this, the Indian promoters took Rs 5,300 crore and the remaining Rs 1000 crore was taken away by the foreign promoters, he said adding that shares having a market price of Rs 100 was sold to promoters at a throwaway price of Rs 20. The difference of Rs 80 per share represents a whopping Rs6300 crore, he said pointing an accusing finger at some foreign companies. About India going for capital account convertibility, Mehta opined that had the country opted for full convertibility, it would have suffered the same fate of Indonesia.

IDBI chairman S H Khan who was present on the occasion said that the country needs greater deregulation to attract foreign funds. "Having taken the decision to become part of the global economy, internationally comparable incentives need to be offered to attract foreign capital. After all they are here not for sentimental reasons but to make profit," he said.

Bhandari, the author of the book and a director of Bank of Maharashtra, said, "Foreign investments in India are welcome, but first Indian enterprises should be encouraged and effectively helped to become multinational in character so as to withstand the competition and financial clout of the foreign investors invading us."

"The mindset of politicians and bureaucrats offering incentives to foreigners firstand Indians later needs to be changed. Otherwise, the flow of foreign portfolio investment instead of adding value would end up in takeover of the vital sectors of our economy at throwaway prices, he added.