CHENNAI, JULY 23: Taking potshots at the UPA government for its decision to increase the Foreign Direct Investment (FDI) caps in some sectors, Tamil Nadu chief minister J Jayalalithaa on Tuesday said the move would not help strengthen the rupee. 

The Cabinet Committee on Economic Affairs had recently decided to raise the FDI ceiling in some sectors, including telecom and insurance. The FDI limit in telecom has been raised from 74% to 100%. In the case of insurance, FDI ceiling has been raised to 49% from 26%. In plantation sector, the FDI cap has been raised up to 49% on the automatic route, and up to 100% with Foreign Investment Promotion Board (FIPB) clearance. 

In an official statement, Jayalalithaa said the FDI relaxation was neither an effective nor an appropriate measure to tackle the macro-economic imbalances faced by the country. "The concerted policy action to promote exports, curb imports of non-essential items, and to eliminate speculative trading in the Forex market are all essential for the rupee to remain strong," she said.