ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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MAHARASHTRA-Wooing Farmers the Wrong Way

The other two measures announced by the prime minister, namely, abolition of restrictions on inter-corporate investment and enhancing of acquisition limits for companies, also seem to have the same objective in mind to give a boost to the stock market. Both these measures again will result in diverting corporate funds from productive investment by putting a premium on dealings in existing shareholdings and thus send the wrong signals in regard to industrial priorities. It is proposed to raise the limit on intercorporate equity investment from 30 per cent to 60 per cent. This raises questions not only about the conversion of companies whose equity is thus acquired into subsidiaries but also about the implications of this in terms of increased monopolistic control. With the enhancement of limits on acquisition of companies these questions get reinforced.

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