Left gives the right indication on reforms

THE EUROMONEY INDIA CONFERENCE

The Communist party of India (Marxist) today promised stability to the United Progressive Alliance government till the objectives of the National Common Minimum Programme were met.

Speaking at the Euromoney conference, CPM politburo member Sitaram Yechury also said that the Left parties were not opposed to foreign investment but the government should ensure that it flows in way that the existing productive capacity is augmented, technology is upgraded and results in higher employment.

"No country can be isolated from the global markets in today's environment," he said. Yechury also advocated a China-like approach while clearing foreign investment proposals suggesting a "case-by-case" approach. He also said that labour laws did not hamper investments in the country.

Yechury said that the NCMP had turned down automatic hire and fire as a concept but discussions on other areas of labour reforms were underway. He also said the government should first ensure a social security net before talking of such policies.

On finance minister P Chidambaram's suggestion that foreign banks be allowed to raise their holding in Indian private bank through creeping acquisition, Yechury said everyone (including the minister) has the right to make suggestions, but when it becomes a policy matter "we will express our view at the right forum".

He said that the government should ensure the creation of sufficient demand in the economy for the manufacturing sector to grow. To boost demand, public spending has to be jacked up, he added.

Yechury said that the government can't shy away from investments in infrastructure and social sectors as private capital would only be supplementary. The CPM politburo member also expressed some concerns on the revenue implications for states once the value-added tax regime was introduced from April next year.