The Centre’s reforms would prove detrimental to a vast majority of people, and in the case of relaxation in foreign direct investment in retail trade, it would displace four crore people directly and affect 20 crore people — one-fifth of the Indian population — indirectly, by ending their means of livelihood, said Sitaram Yechury, politburo member (Communist Party of India-Marxist) and MP.

Addressing the 13th biennial conference of Lakshmi Vilas Bank Officers’ Association here on Saturday, Mr.Yechury said that reforms would benefit only foreign capitalists and there would be no purchasing power for people.

“Our party in 2004 prevented FDI in retail sector bill, Banking Regulation Act from becoming a legislation, and opening up of insurance sector. When there is a global economic crisis, it is not right to open up our economy which will be disastrous,” he said.

Under capitalism, no matter whether it was intellectual or physical labour, exploitation took place because of its inherent nature. “It is a system against which we have to fight everyday as the essence of capitalism is to extract as much profit as it can.”

Imperialist globalisation during the last two decades had brought the global economy under severe crisis for the fifth successive year. No country in the world could regulate the flight of capital entering into it. Globalisation was the result of internal dynamics of capitalism.

New financial instruments such as venture capital had brought the entire banking system into a financial crisis. Globalisation had forced the State to withdraw itself from delivering various social schemes in order to make way for the flow of capital. The consequence was increase in profits for transnational companies but there was no purchasing power among people.

The different phases of global economic crisis starting from cheap credit in the form of sub-prime loans resulting in failure to repay, followed by economic crisis and bailout packages to financial institutions had led to bankruptcy of State in many European nations which had eventually led to the defeat of ruling parties in as many as nine nations within the EU, pointed out Mr.Yechury.

“International capital is heading towards India, China and Brazil to open their economy further and these big ticket reforms here are part of that. There is a misinformed propaganda on FDI that greater capital movement within the economy will spur economic growth. But a single fluctuation in the global capital will suck Indian economy and ruin it.”

Investments which would not result in increasing the purchasing power of the people would result in producing speculative profits. Government should think about fiscal deficit reduction.

“Our fiscal deficit is 6.9 per cent, which according to our budget papers is Rs. 5.22 lakh crore, and the tax concessions given to wealthy companies and individuals stands at Rs. 5.28 lakh crore. This being the situation, the government is cutting down subsidies meant for the poor instead of cutting down subsidies for wealthy companies. But they term the subsidies for the elite as incentives and for the poor as burden.”

Mr. Yechury said that the solution lay in reducing the fiscal deficit to three per cent and stopping subsidies for the rich and collection of taxes to augment infrastructure and create new jobs and increasing the purchasing power.

“As it will take time, the government wants to make quick profits and is opening up the economy further. This neo-liberalism trajectory that supports trans-capital and India’s big capital should be fought against tooth and nail and that needs the coming together of various associations and trade unions thus form a powerful movement.

Talking to reporters on the sidelines of the meeting, he said that CPI(M) opposes cash transfers to PDS as the former did not take into account inflation which would affect the buyers.

When asked about the lack of momentum in struggles against FDI, he said, “It will pick up, many traders’ and truck owners’ associations have started to support us. Though many States are lobbying for entry of foreign capital, constitutional provision is such that the decision rests with the Centre. The two-day national level strike called by the National Confederation of Trade Unions in February has seen for the first time that Bhartiya Mazdoor Sangh and Indian National Trade Union Congress supporting us.”

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