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Tighten capital controls, CPI(M) counsels Centre

Special Correspondent

Scrap the New Pension Scheme: Karat

Prakash Karat

NEW DELHI: The Communist Party of India (Marxist) on Wednesday warned the Manmohan Singh government not to tackle the financial crisis in a manner that only helped the big corporate and private financial institutions.

Party general secretary Prakash Karat said here that the central committee that ended its three-day meeting in Kolkata on Tuesday demanded that the government stop relaxing measures for speculative capital flows; tighten capital controls and financial market regulations; stop efforts to deregulate and open up the banking and insurance sector to foreign capital; scrap the New Pension Scheme and withdraw the Pension Fund Regulatory & Development Authority Bill; provide uninterrupted credit to small and medium enterprises; ensure bank credit to farmers and weaker sections; and stabilise rupee value.

Mr. Karat said it was the firm opposition of the Left parties while supporting the United Progressive Alliance government that prevented the legislation to increase the FDI cap in insurance from 26 to 49 per cent.

He said the Left also opposed amending the Banking Regulation Act to facilitate 74 per cent FDI in private Indian banking and also the adoption of the Pension Fund Regulatory & Development Authority Bill.

The CPI (M) general secretary said the government should note that the U.S. lost $ 2 trillion of retirement funds in the stock market crash. He said this meant that the savings of employees who were heading for retirement had been wiped out. The government should stop the move to put provident and pension funds in the stock market.

Mr. Karat said there were lessons that India needed to draw from the financial crisis in the U.S. and other parts of the world. The Manmohan Singh government, he said, had been pushing the very same policies which spelt ruin for the financial system in the U.S. and many European countries.

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