P). Since Independence the policy of the government of India towards private foreign investment and collaboration has moved from cautious encouragement through a brief spell of near 'open door' in the fifties, a long phase of rigorous selectivity from 1968 to 1991 onto current post-1991 policy of open encouragement of direct investment specially in priority areas even with 51 percent participation in equity.
1). Independent India started with a legacy of well-established foreign capital and all the fear and prejudice associated with it.
2). Based on the exposure of a series of misdeeds perpetrated on some third countries by some of the multinational like International Telephone and Telegraph corp. (ITT), United Fruit, Union Miniere and Lockheed, criticism welled up against the MNCs in the Indian parliament and outside.
3). During the seventies and eighties, official view has been inevitably influenced by the controversy the world over on the role of multinational corporations in relation to third world countries.
4). While the overwhelming thrust has all along been towards the goal of a self-sufficient economy and of freeing national economic and industrial policy from the dictates and manipulates of foreign capital, the compulsions of an economy of scarcity and chronic foreign exchange deficiency also had an effect in shaping official policy towards foreign investment and foreign collaboration.
Q). On the other hand, there was also a realisation that all foreign enterprises operating in India should not be tarred with the same brush and that there were some amongst them who were performing a useful role in the economy by their import-substitution or export-oriented operation, or by making valuable contribution to the technological skill and capability of our country.
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