New Delhi, Sept. 7: The Centre is likely to raise the foreign direct investment cap in the telecom sector regardless of protests from its Left allies.
The United Progressive Alliance government, a senior Congress leader said, will go ahead with its FDI policy in telecom.
Senior Left leaders told the media that the Centre is preparing papers to implement the new policy. But clearly in no mood to give the Congress a breather on policies involving privatisation and investment of foreign capital, the Left parties have circulated a note outlining the reasons for their opposition to the FDI decision.
This evening, CPI general secretary A.B. Bardhan led a delegation of Left trade union leaders to Prime Minister Manmohan Singh and urged him not to implement the electricity act, which paves the way for privatisation.
The Left and the Congress had clashed on this even when the ruling alliance’s common minimum programme (CMP) was being hammered out. Though in favour of private companies in the power sector, the Congress had yielded to the Left’s wishes and deferred a commitment in the CMP.
So far, the Congress has given the Left a patient hearing and tried to convince it of the urgent need of some economic reforms the government is trying to bring about. But the Left continues to be critical, both in public and private.
The Congress believes it has to take forward some of the economic policies even if these are in contradiction with its ally’s views. Singh had after all put India on the threshold of liberalisation in the early 1990s as finance minister.
Senior Congress leaders feel the Left will have to take a more rational view of the economic situation.
But Left leaders say the main ruling party should have learnt from the general elections when people pushed out the National Democratic Alliance government despite its claims of economic progress and a high-voltage “India Shining” campaign.
Left leaders want the Congress to scrap most of the earlier liberalisation policies.
The Congress, however, insists that it has to govern and, therefore, cannot be solely guided by the Left’s considerations.
So the ruling party says it will consult the Left on important policy matters but will not let its opposition come in the way of introducing important reforms.
The Centre, however, will not touch the issue of FDI cap in the insurance sector because of the opposition it will face in Parliament over changing the Insurance Regulatory Authority Act.
Both the BJP and the Left will oppose the amendments to raise the FDI limit in this sector. As a result, the government will not be able to push through the changes.
The Left, however, has not taken a tough stand against FDI in civil aviation because of internal divisions. The CPI, for instance, is not opposed to FDI in the ancillary services of civil aviation.