Sitaram Yechuri, an ideologue of the Left in India, is not a member of parliament, and his party is not part of the Congress-led government, yet he and his party play a vital role in shaping the government’s economic policies. The arithmetic of the electoral mandate has put the left-wing parties in India – of which the Communist Party of India (Marxist) is the largest, with 43 seats in the 543-strong lower house of parliament – in a powerful role where the current government leans on it for survival. The CPI(M) has more seats in parliament than any other ally of the Congress, yet chose not to join the government, extending what it calls “critical support” to it.
This allows the Left to shape the economic policies of the new government as well as criticise it for the ones it does not agree with, assuming the role of an opposition party. For instance, the Left has criticised the decision in the budget to raise foreign investment limits, while another decision to allocate fresh money to two unprofitable state companies appears to have satisfied them. Mr Yechuri and his party have criticised the modest increase in fuel prices, and the privatisation of Mumbai and Delhi airports announced recently by the Singh government.
Just how far the Left will go to oppose the policies it does not agree with is unclear though. Much of the CPI(M)’s rhetoric against big business and foreign capital has been toned down in recent years in favour of a more pragmatic approach. Mr Yechuri says his party is open to the idea of privatising loss-making state firms but not profitable ones, and it will not oppose foreign investment provided it creates new jobs and brings in technology. While conceding that no country can stay isolated from the world today, Mr Yechuri stresses that the “opening up” should not be at the expense of local industry or national sovereignty.
But the current political climate, where reform is not being seen as helping the poor, has given left-wing parties fresh ammunition. The worry is that the price of taking the Left along with this government could be a higher fiscal deficit, and possibly higher taxes, both deterrents to economic growth.
