Editorial

Unwise To Force The Left To Bite

PREDICTABLY, corporate India and its drumbeaters have embarked on Left bashing given our reaction to the union budget. Almost all national dailies carried editorials advising the Manmohan Singh government to ignore the Left’s protest. The refrain is the following: “Red riding hoods” (Hindustan Times), “Scream and bear it” (The Pioneer) “Ignore the Left’s protests” (The Economic Times) and so on. The essence of the argument is that the Left’s objections are based on its ideological perception which, according to these pundits, are neither valid nor relevant in a globalised world. Another strain of argument is that since the Left cannot afford to allow the RSS/BJP stage a come back, its protest will have no teeth. Hence, they should be ignored. The Left, we are told, will only bark but not bite.

In the first place, it must be understood that a major component of the people’s mandate in the recent elections has been the cry for improving their livelihood. The unashamed prescriptions for bolstering corporate profits at the expense of people’s livelihood followed by the earlier BJP-led NDA government were resoundingly rejected. The new government must keep this in mind and this must find reflection in their policies. Instead, corporate India would want business to continue as usual, now that elections have come and gone! That these elections have clearly rejected an economic trajectory followed by the earlier government is sought to be erased. 

The Left, therefore, while welcoming the positive pro-people policies in the budget, has expressed its criticisms and opposition to certain policies which seek to carry forward the economic trajectory which was rejected by the people. The increases in the caps for Foreign Direct Investment (FDI) in telecommunication, civil aviation and insurance belong to this category. So are the proposals to increase the caps on Foreign Institutional Investment (FII). These will only make India more vulnerable to the control of foreign capital and work to the detriment of the Indian people. For instance, in telecom, even the USA does not allow more than 26 per cent of foreign investment. European countries, similarly, do not allow more than 35 per cent. The argument that huge foreign investment is required to improve India’s tele density is flawed as proved by our own experience. Earlier it was argued that India would require FDIs to the tune of $37 billion to reach a tele density of 7 by 2005. India has already achieved a tele density of 7.04 by March 2004 from 3.5 in 1999 – one of the highest growth rates in the world. And, this happened without an increase in the FDI cap. Further, telecommunication is a sector sensitive to security considerations and, therefore, many countries restrict foreign control. It is precisely for this reason that the NDA government which wanted to increase the FDI cap could not do so under pressure from the defence ministry. Despite this, the UPA government proposes to go ahead ­­and increase the cap to 74 per cent. 

Likewise, the increase in the FDI cap in the insurance sector has the danger of foreign capital having control over India’s domestic savings. Apart from all other negative consequences, this would mean that foreign companies will determine how best to use these resources for enhancing their profits and not for the overall socio-economic development of our country. Today, the State-owned insurance sector is the biggest contributor financing India’s five year plans. This would now be adversely affected. Further, State-owned insurance companies cross-subsidise the rural and other socially necessary activities through the profits they earn from the urban sector. Enhancing the FDI cap will facilitate these private companies to target the urban high profit markets and stay away from rural and other socially necessary insurance cover investments.

Hence, to rubbish the Left’s opposition to these proposals as being `ideologically motivated’ is, in reality, the ideological response of the liberalisation pundits who seek to barter away India’s economic sovereignty.

The Left, therefore, has unambiguously stated that it shall oppose these and other such proposals both on the floor of the House and outside on the streets.   While the Left will never allow any scope for the RSS/BJP to stage a come back, it shall also not allow the present government to impose burdens on the people negating the electoral mandate in the name of continuity of reforms.  For the sake of India, i.e., Bharat, it would be unwise to force the Left to bite.