The government has termed as "economically irrational" the provisions that debar US companies from hiring people holding H-1B visas if they take help under $787 billion economic bail out package, which President Barack Obama has signed into law.
"I think it is an indication of protectionism and interestingly it is an extremely bad decision," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters on Tuesday night even as several MPs demanded that the government take up the matter with Washington.
"The decision says that if you have a company that needs assistance it must not hire H-1B visa workers, which really means if you have a company that is weak and you want to assist it you are going to deny it the opportunity to hire cheaper labour. To my mind it is economically irrational," Ahluwalia said.
"This is the beginning of what could be an irreversible slide into protectionism which happened in 1930," he added.
Meanwhile, several parliamentarians led by MP and chairman of the parliamentary standing committee on industry V Hanumantha Rao wrote to external affairs minister Pranab Mukherjee requesting that the government intervene to protect the interest of Indian non-immigrant workers in the US who go there on H-1B visas.