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“Left struggle insulated economy from global crisis”

Staff Reporter

We did not allow FDI in all sectors: Brinda Karat

MADURAI: The “insulated Indian economy,” which remained unaffected by the present global economic crisis, was a contribution not of the Manmohan Singh government but of the Left parties, CPI(M) Polit Bureau member Brinda Karat said on Saturday.

Talking to journalists, Ms. Karat said it was because of the relentless struggle by the Left and trade unions that the push for deregulation of the Indian market by the four-and-half-year-old UPA government to allow foreign direct investment (FDI) in all sectors had not happened.

Conflicting statements

It seemed the government did not learn its lesson from the global crisis stemming from the fall of three financial giants in the U.S., she said. Finance Minister P. Chidambaram was making conflicting statements on the issue. On one hand, he said “the insulated” economy helped India stave off the global crisis and, on the other, he wanted to go ahead with economic reforms.

Ms. Karat was here to inaugurate a four-day, 30th general conference of the South Zone Insurance Employees Federation.

Speculative trading

Stating that oil prices were rising not because of an increasing demand but because of speculative trade, she pointed out, “Oil futures have grown 400 times in the last five years.”

The increasing prices of essential commodities were also a fallout of speculative trading. “[At a time] when malnutrition and hunger are growing in such an economy, the Indian government is still not ready to put an end to speculative capital.” On the contrary, the U.S. government had banned futures trade in 800 commodities, Ms. Karat pointed out.

Tata-AIG Insurance was able to assure policyholders that it would overcome the crisis caused by the fall of its U.S. partner, American International Group, because the Tata Group held 74 per cent shares in the joint venture. Had 49 per cent FDI in the banking and insurance sectors been allowed, as proposed by the Union government, the global economic ‘tsunami’ would have severely affected the Indian banking and insurance sectors, Ms. Karat said.

The Left parties would oppose the Banking Regulation (Amendment) Act and not allow the hard-earned money of Indians to be held hostage by profit-oriented foreign banks.

Nuclear deal

On the New Delhi-Washington deal, she said India could not be allowed to become a strategic junior to the U.S. for a small quantity of nuclear power. She said nuclear power was most expensive and that was why the U.S. did not have any nuclear plant after 1996, and uranium-rich Australia was yet to have its first nuclear power plant. The deal did not guarantee uninterrupted fuel supply and transfer of technology.

On the contrary, the Indian government had sent a letter of intent, giving consent to give contracts to U.S. companies for setting up nuclear power plants for producing 10,000 MWe, she said.

Ms. Karat called upon the trade unions to join the nationwide protest against the nuclear deal on September 25, when Dr. Singh meets U.S. President Bush.

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