CPI(M) to oppose Bill on FDI in commodity exchanges

CPI(M) 19TH PARTY CONGRESS

After identifying price rise and agrarian crisis as the two biggest failures of the UPA government, the CPI(M) today tightened the screws on the Centre on the two issues.

CPI(M) General Secretary Prakash Karat today announced that his party would not support the Forward Contracts (Regulation) Amendment Bill, which will allow foreign direct investment (FDI) in the country's commodity exchanges.

"This will encourage speculative activities in the commodities market, resulting in further price rise," he said.

At the same time, the party has warned the government against allowing private and foreign banks to commence operations in rural India.

In a resolution adopted at the 19th Party Congress held at Coimbatore, the CPI(M) said, "The Economic Survey 2008 had made the most dangerous proposal that private and foreign banks with 100 per cent FDI be permitted to start operations in rural India. Such profit-motivated operations will be free of social obligations and will further snare farmers in the debt trap. The 19th Congress strongly opposes such a proposal."

It has asked the government to re-establish social and development banking as official policy and immediately announce higher minimum support prices for paddy and other farm outputs.

In a veiled criticism of Prime Minister Manmohan Singh, the party today said that the present agrarian crisis is "caused by financial liberalisation policies since 1991". Singh was the finance minister under Prime Minister Narasimha Rao in 1991.

Hours before the Cabinet Committee on Prices met in the capital, Karat warned the government against adopting contradictory policies to control price rise.

"It is good if the government takes some steps to check price rise. But the government often does something with right hand and then does the opposite with the left hand," said Karat.

Pointing out his opposition to the Forward Contracts (Regulation) Amendment Bill, slated for introduction in the second part of the Budget session of Parliament, Karat said, "If large amount of foreign capital enters commodities market, we will not support it as it will not curb speculation in commodity trading."

"The Bill is meant to replace an ordinance but we want the ordinance to lapse," he said. The Centre had issued the ordinance in January last to give the Forward Market Commission necessary autonomy and more power by amending the FCR Act.

Resolving to launch struggles on the agrarian crisis, the party asked for more public investment in agriculture while maintaining that the recent loan waiver was not of much help for the farmers.

"It is estimated that the additional financial requirements for implementing the recommendations of the Swaminathan Commission are of the order of 3 per cent of the GDP. This is an essential investment," it said.

The CPI(M) also demanded that the system of MSP should be extended to all 26 crops covered by the Commission on Agricultural Costs and Prices and the government should ensure that input costs are under control.

The Party Congress today adopted the draft political resolution without disagreement or alternative proposals on the draft. The organisational report was also placed in the meeting today and discussions on it will start from tomorrow.

Meanwhile, accusing the RSS-BJP of trying to "polarise" the society on various issues, the CPI(M) today charged the UPA government with failing to confront "Hindutva" forces.

"It is most unfortunate that the UPA government has been unable to confront the Hindutva forces and, on the contrary, adopted a vacillating position," Karat said.