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January 8, 1998


Left-UF economic contradictions come to the fore

R R Nair in New Delhi

The economy spells trouble for the Left Front because of Union Finance Minister Palaniappan Chidambaram's liberalisation drive.

Chidambaram's policies are opposed to the Left agenda, but the Communists cannot desert the United Front on this ground.

Asked about this inherent contradiction within the Front, Communist Party of India national secretary D Raja told Rediff On The NeT, "We will have to see whether Chidambaram becomes the next finance minister. There is a perceptional difference with Chidambaram on many issues."

The Left parties, which will issue a common manifesto for the first time, have not yet constituted a manifesto committee.

"The Communist Party of India-Marxist's Sitaram Yechuri is out of town,'' said Raja. ''As soon as he returns, we will sit together with the other Left representatives and chalk out the manifesto within a week."

The manifesto will bring into sharp focus again the Left-UF contradictions.

Prominent among these is the issue of disinvestment. Opposing the UF move to offload the government holding in the public sector companies, the Left feels this would not be a way out of the fiscal deficit.

Apart from the navaratnas -- public sector companies which enjoy a certain degree of autonomy -- even the hotel industry is a holy cow for the Left. For, the Left is against the State withdrawing from all economic activities.

And if at all disinvestment is to take place, that would be done only after discussions with trade unions. "There is no need even to sell off hotels in prime locations which are making a profit. We can let the employees run the show collectively," said Raja.

Though foreign investment is not opposed blindly, the Left feels the entry of foreign institutional investors is a misplaced priority.

As for the foreign direct investment, the Left wants the government to call the shots and decide who should invest where and how much.

Transnational giants are to be discouraged in non-core and non-strategic areas.

The bottom line is that nobody should be allowed to make a quick buck, dumping white goods into the country.

Regarding the insurance industry, the Left feels it should not be opened up even for private Indian enterprises. The Left questions the BJP's move of allowing the Indian giants to enter the insurance sector.

The Left wants public sector giants Life Insurance Corporation and General Insurance Corporation to be strengthened.

According to the Left, capital account convertibility, as envisaged by the S S Tarapore committee, is unrealistic, especially so because of the East Asian crash since mid-1997.

As for the World Trade Organisation membership and its upcoming multi-lateral agreement on investment, the Left parties blame the Congress for signing up with the world body. Now that the country is a WTO member, the Left does not see a reason for severing links with the organisation.

Instead, the parties prefer to fight within the WTO, garnering support from other developing countries to defend the country's interests.

Land reforms would be one of the thrust areas for the Left parties. They claim it is the only way to improve the labour-landlord relations.

Not just to avoid Jehanabad-like massacres in the future but to increase agricultural productivity to the targeted 4.5 per cent during the Ninth Plan period.

With an agenda diametrically opposed to that of the finance minister, the UF partners will have a tough time convincing the electorate of how serious they are about their manifesto.

But then as a senior CPI-M official said, "Nobody is going to talk about the economic policy and the contradictions therein. The election is going to be fought on Sonia Gandhi, Bofors and a temple which are not going to help the poor."

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