The Hindu : National : Left parties upset over rise in FDI cap

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Friday, Jul 09, 2004

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National

Left parties upset over rise in FDI cap

By Our Special Correspondent

NEW DELHI, JULY 8. Left parties today broadly welcomed the budget proposals as regards its concern for agriculture, employment generation, health, education and rural poor but made it clear that the proposal to raise the cap on foreign direct investment (FDI) in telecom, insurance and civil aviation sectors was ``unjustified'' and a ``cause for concern''.

The parties are expected to raise the issue in Parliament when the proposals come up for discussion and to mobilise the support of the people on issue that were not in conformity with ``people's interest''.

The Communist Party of India (Marxist) welcomed the concern for agriculture development, employment generation, health, education, overall condition of the rural poor and imposition of 2 per cent cess for the education sector.

``Other positive measures include the revival of the Rural Infrastructure Development Fund, the proposals for repair of water bodies and a nationwide water harvesting strategy. The intention to double the flow of agricultural credit in three years, while not a budgetary measure, is also a step in the right direction,'' the CPI(M) politburo said in its statement.

Hoping that the constitution of the Board for Reconstruction of Public Sector Enterprises would lead to the revival of ailing public sector units, the party said the proposed equity support of Rs. 14,194 crore to the central public sector enterprises also suggested a commitment to the health of the public sector. But the decision to divest National Thermal Power Corporation shares in this context was a ``source of disquiet''.

The party said budgetary allocations for rural employment schemes, Antyodaya Anna Yojna were no higher than already provided for in the interim budget and felt it could have been larger given the stated priorities of CMP.

It described as ``necessary'' the reduction of interest rate charged by the Centre on loans to the States but said the strengthening of finances of State Governments was critical since they have to play an important role in fulfilling the objectives of the CMP.

``Certain measures announced in the budget speech are unjustified and are cause for concern. The decision to raise the cap on FDI investment in three critical sectors of telecom, insurance and civil aviation will give rise to reduced national control over these strategic areas and cause unnecessary outflow of foreign exchange through repatriation of profits,'' the statement said.

The Communist Party of India said the budget was ``pro-people'' that had given priority to agriculture and rural development. ``

However, there are some lacunae. There is no reference to land reforms and comprehensive legislation for agriculture workers''.

In its statement, the party central secretariat said the failure to raise the interest rate on provident fund would be resented by the employees and the announcement for creating a separate public sector enterprises reconstruction board was ``vague''.

The Revolutionary Socialist Party expressed unhappiness that neither did the Government restructure the duties in the petroleum sector nor allocate sufficient resources for traditional industries.

The party MP, Abani Roy, said the RSP would raise its objections during the debate on the proposals in Parliament.

The CPI(ML) said the budget did not address two crucial concerns expressed in the Economic Survey, one being low tax-GDP ration and growing unemployment.

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