What's the story behind 100% FDI ?

Now 100% foreign direct investment (FDI) are allowed in Defence and Aviation Sector in India? Is it safe to allow the same?
Past many years there has been a lot of debate on 100 % FDI and the government has seen lot of opposition but now the Centralgovernment, without any noise announced 100 % FDI in Defence and Aviation on Monday. 

Till date there has been about 49 % FDI in Defence and Aviation sector. So according to the latest statement almost 51 % is increased making to 100 %FDI. This is first time in the Indian history that India has given 100 %FDI in Defence and Aviation sector. 

The government has made amendments to the Arms Act in 1959 to raise the FDI in Defence sector making it 100 % and 74% in pharmaceutical sector.

 As per government experts, “With India’s decision of 100 % FDI, we would have access to world-class quality of arms and ammunition, latest technologies of foreign companies etc. India’s Defence sector requires massive investments in research and development of advanced foreign expertise and with 100 % FDI it will be easy. One of the biggest companies to produces arms and Ammunition, Boeing could also establish their offices in India.” When UPA was in power, they wanted to implement the same but then the NDA government opposed 100 percent FDI in Defence sector. But now after ruling for two years, Modi led NDA Government has changed their colors and granted permission to make 100% FDI in Defence and Aviation. 

Another expert on the ground of anonymity explained that, “If a foreign company invests in India, will they be producing according to India’s requirement or theirs? The question is how honest will they be? India had good connection with Russia and the bond of friendship was raised as we took MiG-21 from them but sadly it was a disaster especially on war field. Not only Russia, but even other countries are thinking of their own benefit. Since other nations are manufacturing weapons in India, the quality of weapons and others will be in their hands. Which somewhere down the line means our nation's security is at stake.” 

In 1992, Dr Abdul Kalam Committee states that review about the quality and quantity of weapons every year is crucial. Every country’s Defence minister and Government should review the same. But it does not happen in India. 
In 2004 ,Kelkar Committee mentioned that if Defence projects of land, water and air are giving to Indian Private sector, then then the quality of weapons will not be compromised and the secret of technology, the procedure will not be revealed. Not just that if the Arms and Ammunition are made in India then the employment rate will also grow up. The committee also mentions that Central Government’s DRDO should be given freedom and liberty in research for Arms and Ammunition. 

In 2007, a committee was specially constituted under the leadership of P.Ramarao which said that the function of Defence sector during the current UPA government and previous BJP government is not up to mark. 

Currently the companies are on a welcoming spree but later this will act as a sin not only the economy but also will be threat to security of the nation.

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SBI Merger: Whose win- Whose loss?

Domestic banking sector saw new ray of hope with NDA government opening new doors. Touted to be one of the biggest public sector bank ‘State Bank of India (SBI)’ and its subsidiary banks were brought under one roof after the Union cabinet recently approved the proposal to merge all the SBI banks. 
The decision of the five associate banks of SBI namely State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore, State Bank of Hyderabad with the Indian Women's Bank will be merged with SBI. 

The first merger took place in 2008, where State Bank of Saurashtra was merged with SBI. It was later followed by State bank of Indore that merged with SBI in 2010. And now the latest merger of the five banks with SBI. With this latest merger of the assets of subsidiary banks & SBI, all SBI ATMs, branches, including the State Bank of India will be worth Rs 37 lakh crore and will have 22,500 branches, amounting a whooping fifty million customers, 60,000 ATMs and the total number of employees will reach to 2,85,500. 
The move seems to be fantastic, Isn’t it?

Why Merger?

Currently, none of the Indian banks has made it to the top 50 banks across the world. But after this latest merger, SBI will be on 45th position. This will inturn benefit the government as SBI is a government bank. Not only the ATMs, but also employees of the bank will be merged. This will lead cost reduction. Finally the customer will be at receiving end as said by State Bank of India Chairperson Arundhati Bhattacharya after the merger proposal was approved by the Union Cabinet. State Bank of India currently needs investments approximately three billion to cover losses.. In the next decade, SBI would require 5 billion for investing in non- performing assets of the bank, experts who can lead the bank etc. According to experts, the Government has now decided to merge SBI to profitable subsidiary banks because those banks will act as a financial cushion.

The customer is at loss!

In 2008 nations were hit with Global financial crises and during the same time the economies of the countries suffered as the top banks were in loses. But the regional bank in developing countries were having incredible profits. 
State Bank of Hyderabad (SBI) Bank, a subsidiary of SBI, each year has been earning a profit of Rs 1,050 crores. After the integration of various branches of the banks, the number of banks will be reduced and this will lead to loss in employment, infrastructure management etc. With a population of 125 million people and less number of banks, the employees of the banks will not be able to give proper attention to the customer. The merger of subsidiary banks in their respective states will also have a huge impact on farmer’s petty traders and others as they will have to move to main branch and this will in turn delay their work. 
With SBH merging with SBI, the Telangana will also face the hit as the profits will now no more come the state but will go to Central Government. 

During the Sensory Association meeting Finance Minister, Arun Jaitley had said, "We need strong banks for economic growth of the county.” But, now, the analysts say that strongest banks will weaken the future.

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