Describing it as a "retrograde step" in a joint representation to the prime minister Atal Behari Vajpayee, they have sought his immediate intervention to prevent its "disastrous fall-out" not only on the domestic industry but also on the livelihood of millions of workers employed in the bidi industry.

Expressing surprise that while the FIPB had deferred decision on a transnational company's proposal to set up a 100 per cent subsidiary for manufacture of cigarettes pending the recommendations of an inter-ministerial committee, the ministry of industry issued a press note reversing earlier policy and allowing MNCs to hold 100 per cent equity for cigarette manufacture.

According to reports, the trade unions said, the inter-ministerial committee is in favour of a cap on foreignequity in the tobacco sector since the government is against encouraging foreign brands of cigarettes.

As tobacco is a low priority item, the trade unions have doubted the motives behind the reversal of the decision. " The haste with which the ministry of industry has come out with the press note gives room to apprehend that the move is to preempt the decision of the FIPB on the lines of inter-ministerial committee's recommendations."

"The abrupt reversal of the policy gives room for suspicion that the note is to favour one particular multinational company," they have alleged.

The signatories to the representation include All India Trade Union Congress (AITUC), Centre of Indian Trade Unions (CITU), Hind Mazdoor Sabha (HMS) and the Bhartiya Mazdoor Sangh (BMS) which is considered close to the ruling Bharatiya Janata Party.

Describing the move as a "deviation" from the government's avowed agenda of Swadeshi, they have demanded that its implementation be kept in abeyance and the labour ministry beassigned the job of assessing its impact on the employment situation.

Drawing the prime minister's attention in particular to the bidi industry, scattered all over the country, the trade unions have said " the livelihood of millions of people dependent on the bidi industry and the unfettered entry of cigarette-producing transnationals will lead to speedy extinction of the bidi industry and further increase unemployment".

The domestic cigarette industry would also be left with an uncertain future affecting thousands of workers in the industry, the trade unions have pointed out adding that the transnationals would also import tobacco with the result that no benefit would accrue to agricultural workers and farmers in the country.