KOLKATA: The central committee of the Communist Party of India (Marxist) observed here on Tuesday that there are “lessons to be drawn for India” from the present global financial crisis.
“The Wall Street model of unregulated finance driven speculation and greed for quick profits have collapsed with disastrous consequences for the banking and financial institutions harmful to the lives and livelihoods of people” CPI(M) general secretary, Prakash Karat, told a news conference after the three-day meet of the party’s central committee.
“There are lessons to be drawn for India from his financial crisis. The Manmohan Singh government has been assiduously pushing for the very same policies which had spelt ruin for the financial system in the United States and many European countries,” he added.
The party has consistently maintained that the finance driven imperialist globalisation is unsustainable. “The manner in which the U.S. government is trying to solve the crisis by bailing out the investment bankers and financers at the expense of the tax payers will only worsen the situation,” the party’s leadership said.
Both the Prime Minister and the Finance Minister are the architects of legislation pushing for financial sector liberalisation and that seeks to open up the insurance and banking sector to more foreign capital.
“They have sought to put the pension funds of government employees into the stock market and have blithely wanted capital account convertibility. All these would have ensured India becoming a victim of speculative financial capital and destruction of its economic sovereignty,” Mr. Karat said.
“Despite the dire experience of hot money flows, the government has sought to tackle the stock market crash by further relaxing norms for the entry of Foreign Institutional Buyers. The minor restrictions of Participatory Notes have been lifted and norms for external commercial borrowing relaxed. These are a recipe for importing the crisis into India,” he said.
The Committee demanded a stop in relaxing measures for speculative capital flows.