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Wrong diagnosis, says Yechury

Special Correspondent

NEW DELHI: The Communist Party of India (Marxist) on Friday questioned the government’s decision to “cling” on to neo-liberal policies when its “trickle down economics” was getting discredited across the world.

Briefing journalists here on the party’s suggestions on how India should deal with the impact of the global economic crisis, CPI(M) Polit Bureau member Sitaram Yechury said: “The government has made a wrong diagnosis and, therefore, its prescription will not help the country. The government refuses to accept the fact that the crisis reflects bankruptcy of the ideology of neo-liberalism.”

Disappointed with the government’s response to the crisis, the CPI(M) said the government was relying upon only one policy instrument — interest rate — to control inflation and reverse the growth slowdown.

Further, the CPI(M) noted that the government has till date chosen to discuss policy responses with only corporate bigwigs and bankers; completely ignoring State governments, political parties, trade unions, farmers organisations and other stakeholders.

“Cut fuel prices”

In particular demanding a cut in fuel prices, Mr. Yechury wanted to know why the government was shying away from this much-awaited decision when it had reduced aviation fuel price by Rs.26 per litre.

Import duty and excise duty on aviation fuel had been reduced but no effort was being made by the government to cut petrol and diesel prices. A cut in fuel prices is among the suggestions that the CPI(M) has made to protect India from the global economic crisis. Other suggestions include a special fiscal package for increasing public expenditure to increase income and consumption of the working people; expand the fiscal deficit of the Central and State governments; protect domestic jobs; announce a moratorium on job or wage cuts in the organised sector; strengthen the National Rural Employment Guarantee Scheme and extend it to urban areas; and massive public investment in employment intensive sectors.

For agriculture, the CPI(M) has suggested that foodgrains production be encouraged and public procurement operations expanded for all major crops across the country. Also, import protection should be accorded through higher tariffs for cash crops such as oilseeds, rubber, and cashew.

Besides, the government should regulate domestic corporate retailers; announce sector-specific relief packages for small-scale industries; reverse steps taken to liberalise capital account convertibility; prohibit Participatory Notes; abandon banking and insurance sector deregulation, and the Pension Fund Regulatory and Development Authority Bill.

About the recent decision of the Cabinet to increase Foreign Direct Investment cap in the insurance sector, Mr. Yechury said it defied logic at this juncture; particularly since Prime Minister Manmohan Singh had on September 30 said that “the foremost challenge is to insulate India from the ill-effects of the international financial crisis.”

Asked whether the Left claimed to have saved India from a worse crisis by fighting several neo-liberal policies that the government wanted to introduce, Mr. Yechury said the CPI(M) did not want to score points by saying “I told you so” as the common man was bearing the brunt of the crisis. “All that we are seeking is a course correction.”

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