Left seeks dialogue on FDI caps

Manmohan Singh government cannot take us for granted, says CPI(M)

The Left parties have sought a "dialogue" with the government on their "concerns" about the Budget that include disinvestment and lifting of foreign direct investment caps in the telecom, tourism and insurance sectors.

Speaking to Business Standard, Nilotpal Basu (Rajya Sabha, CPI-M) chose his words carefully when he said the Left parties "have acted with an extreme sense of responsibility about the clauses that they disagree" with in the Budget.

"But Finance Minister P Chidambaram must realise that he cannot take us for granted," Basu said. He said there were many ways of showing protest.

It was suggested to him that Chidambaram had, by raising FDI caps in these sectors in the Finance Bill, presented the Left parties with a fait accompli.

They were unable to let the government fall by voting against the Finance Bill, at the same time, forced to support the Budget with extreme reluctance because it contained a number of elements that were ideologically repugnant to them.

When asked when the CPI(M) proposed to have a dialogue, Basu replied that the proposal for a dialogue had not come from the Left but from the government. So it was up to the government to invite them for talks.

"It was the Bharatiya Janata Party (BJP), which capped FDI in insurance at 26 per cent. At that time BJP leaders said the Congress was opposed to a higher cap and so did not press for it. If the present Congress government wants to alienate the Left to carry out the agenda of the BJP, we have nothing to say," Basu said.

He also said a meeting of the CPI(M) politburo was scheduled here Delhi on July 11, which would discuss the Union Budget among other things.

Basu said the issue of FDI caps was discussed with the finance minister in pre-Budget meetings. "He told us he was thinking about it, and we said we are opposed to it. We would be hypocrites if we said that he did not discuss the issue with us. But he knows we did not want it," Basu said.

He agreed that the CPI(M)'s public protests, demonstrations and slogans were centered around pushing back the FDI in certain sectors, partly because the FDI was not necessary in some sectors but also because in this very Budget, the finance minister had announced a Rs 40,000 crore fund in which the Life Insurance Corporation (LIC) was a member, to support activities of the tourism, ports and other sectors.

"If the LIC has this money to spare, why get foreign direct investment in the picture" Basu said.

He also pointed out that by raising FDI caps unilaterally the government had given away valuable leverage in multilateral trade negotiations.

It is clear that in its dealings with the Congress government on matters where it differs, the Left wants to strike but is afraid to wound. The Politburo is likely to decide further course of action.