FM tries to show Left the right path on FDI

But Left is not impressed with appeasement move.

Finance Minister P Chidambaram is to meet each of the Left parties separately this week to placate them over the government's decision to hike the foreign direct investment (FDI) cap in the telecom sector.

But the Left is already bristling over the FDI issue. Left sources said that FDI was a fait accompli and the meetings were aimed at appeasing the combative communists because a final decision regarding the hike had been reached.

"The move will hamper co-operation between the government and the Left," CPM politburo member Prakash Karat said when asked what the Left's further course of action would be.

In the wake of the crucial meeting between CPM veteran leader Jyoti Basu and the Prime Minister on Saturday, the government was forced to drop the issue from the Cabinet's agenda on Friday.

Sources in the CPI said the finance minister's meeting with the Left leaders would be "informal" and that he was likely to put forth a new formula to address the issue of security concerns that the Left says the hike in FDI in telecom will lead to.

Of the proposals doing the rounds, it has been suggested that the Board of Telecom Ventures should only have Indian citizens in a bid to allay the Left's apprehensions that the sector would be dominated by foreign companies.

Another proposal put forth by the Department of Telecom (DoT) suggests that the minority Indian partner with 26 per cent stake in the telecom venture should have 50 per cent representation on the company's board. This has not found favour in large sections in the government and is also seen as legally untenable.

The FDI issue has been fraught with debate, the government having assured the Left of "actively considering" their demands at the last UPA-Left coordination committee meeting.

Consequently, the Left parties made their "notes" to the government on FDI in telecom and insurance public. They were acting on information that the papers for the hike were being prepared. There was opposition to the move from within the government too --- Information Technology and Communications Minister Dayanidhi Maran supported the Left.

In the context of the decision to formally include members of the World Bank and other multilateral agencies in the consultative groups of the Planning Commission, the Left's relations with the government are strained.

While Basu's New Delhi visit has had a reassuring effect on the stability of the coalition, the decision to proceed with FDI in telecom may not be bereft of "repercussions" a senior left leader said.