Special Correspondent

"Industry will suffer unless agriculture improves"

  • Calls for move to tax the rural rich
  • Says compensation paid in Singur the highest

    KOLKATA: CPI(M) Polit Bureau member Sitaram Yechury said on Thursday that there was a great mismatch between shining India and suffering India and this would be the millstone impending India's further growth.

    Addressing the members of the Merchants Chamber of Commerce here, Mr. Yechury said it was difficult to achieve a 10 per cent growth rate with a growing rate of suicide by farmers. The Singur issue was at the fore of his talks with chamber president Santosh Saraf as were his views on FDI in retail, reservation in private sector, labour and pension reforms.

    Mr. Yechury said there should be a move to tax the rural rich. "Widen the tax-base rather than hike rates," he said adding that while 10 per cent of the rural community lived in affluence, the remaining 90 per cent turned suicidal. Industry would suffer unless agriculture improved and the farm sector needed high doses of investment and credit availability to contain the suicides.

    Dispelling the misconception that communists did not favour the growth of the corporate sector, he said this was not true since wealth creation was a precondition for people's welfare. Although all parameters favoured India's transition into an economic powerhouse, there was a need for all-round growth and for increased public investment. There was also a need to "employ the unemployed as their economic empowerment will sustain domestic production." In India, however, the cart had been put before the horse.

    On Foreign Direct Investment in retail, he said that while no country could remain isolated, it had to integrate on its own terms. FDI in retail had to satisfy three conditions of adding to the domestic industry's capacity (by setting up new factories rather than buying existing companies), had to bring technological upgrading and enlarge employment opportunities. "These conditions have to be satisfied in every sector where FDI is being sought." On labour reforms, Mr. Yechury said that hire and fire policy would not suddenly make things hunky-dory. "There cannot be any dilution of existing rights of workers but some fine-tuning could discussed. However, industry must also think of safety nets for workers.

    On the issue of EPF, pension and GPF, Mr. Yechury said that management of pension funds had to be entrusted to PSU managers. There was need to ensure that it did not go to speculative avenues and that it brought an assured return to workers as per commitments made in this regard.

    Mr. Yechury said that agricultural land loss was a natural process towards industrialisation and the compensation paid in Singur was today the highest in the country. In West Bengal, it was difficult to find non-agricultural land. He discounted reports that land had been given exactly as Tatas wanted it. "They wanted a rectangular land but an odd-shaped plot was earmarked trying to avoid the more fertile lands as much as possible."

    Mr. Yechury reiterated the need for a new land acquisition act, which would set the compensation norms and create a legal framework for setting up alternative livelihood issues.