Left to oppose FDI cap hikes in Parliament

There will be discussions on what kind of amendments are required in the Finance Bill: Yechury.

The Left parties will oppose the hiking of foreign direct investment (FDI) caps in aviation, insurance and telecommunications. They would block in Parliament Bills that might effect the hike, Left Front sources said yesterday after a meeting of the Communist Party of India (Marxist) Politburo.

The CPM and the CPI had exhaustive discussions on the subject yesterday. Other partners of the Left Front were likely to meet to decide a common strategy on the issue, Revolutionary Socialist Party (RSP) leaders said.

The Left is faced with carrying out a seemingly impossible balancing act of preventing the Congress-led United Progressive Alliance government from falling in Parliament "" which it will, if they persist in opposing the Finance Bill, which effects the hike in FDI caps "" and being consistent in their long-term opposition to such a hike.

However, things may never come to that, since the Finance Bill is unlikely to refer to FDI caps in aviation and telecommunications.

But the Left, sensing the chance to start a political agitation, was full of fervour. "We are against privatisation and we will oppose it (the hike in FDI limits) in Parliament," the leader of the trade union wing of the CPM, MK Pandhe, said.

There was another view. Sitaram Yechury, CPM Politburo member said the matter would first be discussed with the government. "There will be discussions with the government on what kind of amendments are required in the Finance Bill," Yechury said.

He said the party would demonstrate outside Parliament. "We will try and persuade the government to see our point of view," he said.

This view was echoed by the CPI leader AB Bardhan, who told reporters in Lucknow that the Left Front would press the government to reconsider the decision but stopped short of saying it would cause the government to fall.

The government is likely to effect higher FDI caps in telecommunications and aviation through executive orders. But in insurance the Insurance Regulatory Development Authority (IRDA) Act will need to be amended because the law pegs the ceiling at 26 per cent.