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Sunday, Jul 29, 2007
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Left against investment in mutual funds

Special Correspondent

NEW DELHI: The Communist Party of India (Marxist) and the Communist Party of India (CPI) have opposed the government move to park 30 per cent of surplus funds of Navratna and Miniratna public sector enterprises in equity-based mutual funds.

“Retrograde step”

In a statement here on Saturday, the CPI(M) Polit Bureau described it as a “retrograde step.”

It said channelling public sector funds into the secondary market in order to make speculative capital gains “amounts to wasting public resources in socially unproductive investments.”

“The CPI(M) and the Left parties had earlier suggested that the reserves of over Rs.2,39,000 crore currently being held by these Central Public Sector Enterprises (CPSEs) should be utilised by massively increasing capital investments by the CPSEs in expanding their scale of operations and creating fresh capacity, diversifying their activities if necessary,” the statement said.

The Centre could also mobilise part of the surplus by seeking higher dividends to fund infrastructure projects and social sector schemes.

“The UPA Government seems to be more interested in fuelling the stock market boom by using public sector surpluses,” the CPI(M) said.

Gurudas Dasgupta, CPI national secretary, described it as an anti-national step and said that funds should be utilised in the social sector and for building of infrastructure.

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