Left saved India from deeper recession: Sitaram Yechury

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Sitaram Yechury, Politburo Member, CPI (Marxist), said had it not been for the Left's efforts to stop four of UPA's measures — capital account convertibility, allowing of foreign banks to take over private Indian banks, the privatization of pension funds, and increasing FDI in insurance — India would have been in a deeper crisis due to the global recession.

The newly-formed Third Front, Yechury said, signifies a shift in policy and presents a change from the UPA and NDA. “Now in the last 11 years of the BJP-led NDA rule and the Congress-led UPA rule, the policies that are being followed are still being followed and are not really going to redress the conditions for the people. So this broad agreement is there, the need for a policy shift, and that is why there is a need for a political alternative to affect such a shift,” he said. “What that shift will be? We (the Third Front) have our ideas, discussions are going on. But that is a premise on the basis of which these parties have all come together.”

Also read: Experts see no serious threat from Third Front

Here is a verbatim transcript of Sitaram Yechury’s exclusive interview on CNBC-TV18. Also watch the accompanying video.

Q: You have been, in a sense, the architect of the formation of the Third Front. Momentum, many say, is on the side of the Third Front at this point. Some also argue that the Third Front is merely a coming together of fence sitters and there is no ideological glue that holds all of you together.

A: The parties with whom there is an agreement today for sharing of seats in different states, which constitutes the alternative that we are trying to form are parties who today have agreed that there is a need for a shift in the policy trajectory being followed in the country. This shift is required all the more because of the impact of the global recession that is falling and the worst is yet to come on it.

Now, in the last 11 years of the BJP-led NDA rule and the Congress-led UPA rule, the policies that are being followed are still being followed and are not really going to redress the conditions for the people. So this broad agreement is there, the need for a policy shift, and that is why there is a need for a political alternative to affect such a shift.

What that shift will be? We have our ideas, discussions are going on. But that is a premise on the basis of which these parties have all come together.

Q: Let us get away from seat sharing and all of that but your manifesto reiterates your stated positions on several issues and these have been your positions for many years: halt disinvestment, which hasn’t really taken off anyway under the UPA, prohibit foreign direct investment in retail, halt liberalisation in some sectors. Your ideological position is well-known. Now isn’t there a need given the global economic crisis, given the slowdown in India for fresh constructive ideas?

A: On the contrary, what everybody thought was outdated will have to now today grudgingly accept the fact that if the four measures that the UPA government was wanting to bring about were not stopped by us in the last four years i.e. your capital account convertibility, allowing of foreign banks to virtually takeover your private Indian banks, the privatization of pension funds or on the question of increased FDI in insurance, if these four were not stopped the impact of the global recession would have been much more devastating.

This everybody accepts, so give the devil it’s due sometimes. You will have to say that in these conditions today, what we are suggesting merits a proper reasoning and a proper attention that has to be given on what is the way in which we can meet the impact of this recession.

Q: Market players for instance are wary of the Left’s presence in any form, in any new government formation directly or indirectly. Would you as a party want to reach out to them to address their concerns as well?

A: We’d like the market players also to understand that there is a new situation in global capitalism today. People who used to rate you with your financial services and ratings, many of the rating agencies themselves have collapsed. So, what the market players have to understand is that you have to increase the purchasing power in the hands of the people and without the consequent aggregate demand enlargement, there cannot be a sustained economic activity and growth.

There is no point only in concentrating on bailout packages at the top for the corporates because however accessible and easy and cheap you make capital available for investment unless in the final analysis you have people with money who can consume the products that are produced, no economic activity can be spurred on.

Look at your own experience with the aviation industry in the last two-three months. You have reduced the price of aviation fuel to be below what common people pay for petrol and diesel and yet the industry is not taking off because unless you have people with the capacity to buy a ticket, you cannot really meet this recession.

So market players will have to understand that first of all you have to strengthen the people’s hands and that can be done only through massive doses of public investment.

Q: Let us leave the reforms aside when we are talking about insurance etc but let us talk about some of ideas that you’ve suggested like scrapping the fiscal responsibility bill or the FRBM Act. How do you expect that to really go down with investors and aren’t you really creating a problem for the next generations and India actually running the risk of being alienated economically if these ideas were pursued?

A: Not at all – alienated from whom? All of them today are in such doldrums that if you are expecting that they are going to come and invest in India, I think we are living in a fool’s paradise. Unless we start moving things ourselves for us in the domestic economy, we cannot really break out of the impact of this recession. Remember, the latest International Monetary Fund (IMF) forecast is that you’re going to have at best a global growth of 0.5 %. China and India probably will be the only two important countries in the world which will show a positive growth rate – all the rest would be negative. So what is the concern today of foreign investors view regarding us as credible? The foreign investor bringing in money into India to invest that sort of situation may come up much later but first try and put your house in order on the basis of your own interventions. The concern should be today expansion of domestic demand and not so much of being on good terms for foreign investment to flow in because there is very little that is going to flow in anywhere in the world leave alone India.