NEW DELHI, 12 July 2004 — With left parties opposed to the union budget’s tilt toward the capitalist right in certain areas, the coming week spells a tightrope walking for the Congress party to retain its balance of power.

Strongly opposing the hike in foreign direct investment limits in insurance, telecom and civil aviation, the CPI (M) said yesterday that if the government does not roll back these measures, it would have to reconsider its decision of supporting the Congress-led coalition.

“Without our support, the government cannot keep its majority… They will have to roll back certain things which they announced in Parliament, if they want our support,” a CPI (M) leader said.

The CPI (M) politbureau met yesterday to consider its stand on these proposals. Later, party leader and politbureau member M.K. Pandhe said: “We are against privatization and we will oppose it (hike in FDI limit) in Parliament.” The CPI (M) was not consulted on these proposals, he said. The party would oppose passage of the finance bill in Parliament, he said. The hike in FDI limit in the insurance sector would require amendments in the Insurance Regulatory and Development Authority (IRDA) Act. “Our party is firm and we will oppose it at all levels. If the bill (to amend IRDA Act) comes up, we will oppose it. That is our stand,” Pandhe said.

In the union budget for 2004-05, presented in the Parliament last week, Finance Minister P. Chidambaram proposed a hike in FDI limit in telecom from 49 to 74 percent, in civil aviation from 40 to 49 percent and insurance from 26 to 49 percent.

“In no country in the world more than 25 percent of FDI in telecom sector is given to foreign companies but our decision to give complete control in the telecom sector is totally anti-national and our party can never support this,” Pandhe said. The FDI hike in insurance and aviation will also not be supported by the CPI (M), he said.

On whether CPI (M) would bring out a cut motion in Parliament, Pandhe said: “If you have to oppose certain things, cut motion is one of the methods. So our parliamentary party will consider this aspect and take steps.” The CPI (M) is also considering holding a dialogue with UPA allies to ask them to reconsider the decision.