Gloves off, CPM wants out

May not withdraw support, but will take battle for reforms to Parliament.

The Communist Party of India (Marxist) is all set to part ways with the Congress-led United Progressive Alliance (UPA), though it will not withdraw support to the Manmohan Singh government.

Three days before the presentation of the Union Budget, top CPI-M functionaries told Business Standard the party would distance itself from the ruling alliance and would oppose it in Parliament if necessary

"The government has been moving away from the basic principles of the Common Minimum Programme. We are of the view that it will be better for us to give only issue-based support to the government," the functionary said.

There seems to be a broad agreement within CPI-M that stepping out of the alliance will help the party politically. It was also pointed out that the CPI-M fears that the close association with the Congress in the long run could dent its political fortunes in its traditional strongholds of Kerala and West Bengal.

A proposal to this effect is likely to be discussed at the Party Congress of the CPI-M, the national congregation of the party slated to be held in New Delhi in April.

This could severely cramp the Manmohan Singh government's ability to carry some key economic reforms through Parliament, including amendments to the Banking Regulation Act for linking the voting rights of foreign investors in private banks with their shareholding and raising the foreign investment limit in the insurance sector.

The CPI-M's support will be essential for pushing these reforms as it is the second largest political party in the alliance with 44 MPs. Besides, with the CPI-M moving out of the alliance, other Left parties like the

Forward Bloc and the Communist Party of India (CPI) may also be tempted to come out of the ruling block.

Senior CPI-M leaders communicated their reservations on various policies of the government in their breakfast meeting with Prime Minister Manmohan Singh today.

Finance Minister P Chidambaram, on his part, promised the Left parties that there would be "positive assurances" in the Budget regarding their demands.

The CPI-M functionary also said the party would oppose the economic policies of the government in Parliament and oppose moves like increase in sectoral FDI cap. "We are even ready to oppose the move in Parliament by voting against the government," he said.

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Red tide rising

Reds rally: There seems to be a broad agreement within the CPM that stepping out of the alliance will help the party politically

Reforms face heat: Key economic reforms, including the amendment to the Banking Regulation Act and raising the foreign investment limit in the insurance sector could be affected

Domino affect: With 44 MPs, the CPM's support is crucial for pushing these reforms. Besides, if the CPM leaves, the Forward Bloc and the CPI could also desert the alliance