CITU concerned over Tarapore Committee report

New Delhi, Sep 2 (UNI) The Centre of Indian Trade Unions (CITU) has expressed serious concern over the recommendation of the S S Tarapore Committee to introduce full Capital Account Convertibility, saying its implementation would encourage sudden flight of capital and cause currency crisis.

''The Tarapore Committee is in effect paving way for a currency crisis, which India has been able to avoid so far due to the existent capital controls,'' CITU General Secretary Chittabrata Majumdar said in a statement.

''The UPA Government should realise that each and every developing country, which has walked the road of capital account convertibility has inevitably courted financial crisis, including the 'miracle' economies of East Asia,'' he said.

The recommendation on bringing down government stakes in public sector banks to 33 per cent, on the lines of the Narasimham Committee earlier, should be rejected, he added.

However, some of the recommendations such as those relating to ban on Participatory Notes and doing away with tax exemptions enjoyed by NRIs and FIIs were on the table much before the Tarapore Committee was constituted, he pointed out, asking the Government to implement them without further delay.

''The Prime Minister, while making a case for Capital Account Convertibility in March, had already overstepped the limits set by the National Common Minimum Programme.

''Since then, we have already witnessed a stock market crash in the month of May, primarily due to the fund pull-out by the FIIs. In this backdrop, any attempt by the UPA government in this direction would be opposed tooth and nail,'' Mr Majumdar said.

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