New Delhi, July 8: The Left parties that extend crucial outside support to the Congress-led Centre made rollback noises as P. Chidambaram’s budget today proposed to hike foreign direct investment in insurance, telecom and civil aviation.

While the Left leaders welcomed the finance minister’s broad “pro-rural” and “pro-farmer” focus, they saw no justification in hiking the FDI cap and raising the investment ceiling for foreign institutional investors in debt funds.

Chidambaram proposed to hike the FDI limit from the existing 26 per cent to 49 per cent in the insurance sector, from 49 per cent to 74 per cent in the telecom sector, and from 40 per cent to 49 per cent in the civil aviation sector.

He also proposed to hike the FII investment ceiling in debt funds from the existing $1 billion to $1.75 billion.

“The insurance sector does not need infusion of funds and private investment in the telecom sector has so far not addressed the concerns of rural telephony,” the CPM’s Nilotpal Basu said, addressing reporters after Chidambaram unveiled the budget in the Lok Sabha this morning.

Also present were Basudev Acharya, the CPM’s leader in the Lok Sabha, and Rupchand Pal.

CPI leader Gurudas Dasgupta was more strident in his opposition to the proposals. “We are opposed to it and we shall oppose it,” he said.

The Left parties, he added, would take up the issue in Parliament and, if needed, take it to the streets. Various trade union leaders would meet on Monday to discuss the issue, Dasgupta said.

The CPI leader also opposed any move to cut Employees Provident Fund interest rate and felt the budget had not come out with specific proposals to check tax evasion.

Elaborating their opposition to raising the FDI limit in telecom, the CPM leaders said the big-time entry of private sector in the last five years had not helped spread the telecom network to rural areas.

“The ratio of rural and urban teledensity currently stands at 1:11 and the rural-urban inequity has accelerated in the past five years,” Basu said.

The Congress, the leading partner in the ruling United Progressive Alliance, however, downplayed the Left’s opposition and fielded one of its spokespersons, Satyavrata Chaturvedi, to brief reporters.

Chaturvedi said the proposals on FDI and FII ceiling hikes were made after consultations among UPA partners and in accordance with the coalition’s common minimum programme.

The ceiling hikes, he said, were made to “attract investment and create employment opportunities”.

Chaturvedi emphasised that what the finance minister stated in the budget were only “proposals”. “It is only a beginning. There will be discussions on it in Parliament and a final view will be taken only after that.”

He described the budget as one for the “aam admi (common man)” that was “pro-rural and pro-farmer” without losing sight of the imperatives of overall economic growth.