Govt may not derail reform process

MANDATE 2004

The Congress-Left combine may be against the National Democratic Alliance's disinvestment policy, but it is unlikely to roll back reform measures already in place.

While the Left parties are against the entry of foreign and private insurers, they will not not ask existing players to wind up their operations. The proposal to allow 49 per cent foreign investment will, however, have to wait.

"We had opposed the insurance bill as it is one of the most important segment in the financial sector. Huge premium has been collected by insurance companies and invested in long-term instruments. Consumers will be affected if we call for a reversal of the decisions," said AB Bardhan, general secretary, Communist Party of India (CPI).

Similarly, in case of public sector companies where the government has already sold off its stake, Bardhan said there would be no rethink.

Congress leader Kamal Nath too ruled out a change in the government's decision. Some allies of the Congress like the Rashtriya Janata Dal are, however, demanding an investigation on the valuation of PSUs which have been disinvested.

The implementation of a nationwide Value Added Tax regime may take off, with the Left not averse to studying the advantages of the system. "The idea was originally proposed by VP Singh. We will discuss the structure he had in mind and implement accordingly," Bardhan said.

The Left is very much in favour of foreign direct investment but wants the flow to be directed towards priority sectors.

"We want FDI in areas where we need it," said Bardhan.

He, however, added the Left was opposed to the multilateral framework on investment proposed by the European Union and Japan, under the World Trade Organisation. The position is similar to the stance taken by the Congress and the NDA.