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EPF interest rate : Left on the warpath |
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The Manmohan Singh Government’s decision to reduce EPF interest rate by one per cent to 8.5 per cent has drawn “friendly” warnings from the Left parties. They forced an adjournment of the Lok Sabha well before schedule, on December 8. Agitated CPI and CPI(M) members supported by their colleagues in the Rashtriya Janata Dal, the Samajwadi Party and even the BJP, vociferously protested against the cut in the Employees Provident Fund (EPF) interest rate from 9.5 per cent to 8.5 per cent. Gurudas Dasgupta of the CPI said that the decision was causing grave distress to four crore workers, many of whom were in the unorganised sector. He said it would cost the Government only Rs. 700 crore to retain the old interest rate, just 10 per cent of the Rs.7,000 crore the Government chose to forego by reducing the turnover tax from 0.1 per cent to 0.05 per cent in the face of protests from stock brokers after the budget.
In the Rajya Sabha, the Left parties protested against the BJP’s attempt to elicit clarifications from the Prime Minister on the Volcker report, pointing out that views on other issues of public concern such as the EPF rate and the cooking gas crisis must also be heard.
Charging the UPA Government with the same “kind of omission”, the previous regime was guilty of, Dipankar Mukherjee (CPI-M) delivered a “friendly” warning asking it to restore the EPF rate to 12 per cent.
Digvijay Singh (Janata Dal United) wondered when Sitaram Yechury (CPI-M) would “bite instead of only barking.”
“Don’t wait for our bite to bring you back to power. You will have to wait for five years,” Yechury replied, adding the Government had rescinded on disinvestment in Bharat Heavy Electricals Ltd. following the stand taken by the Left.
Asked outside the House about the Left’s options if the Government was unyielding, Yechury said, “We do not want the situation to reach that stage.”
The CPI(M) has cautioned about an imminent confrontation building up with the UPA Government over the EPF interest rate issue. The party said in New Delhi on Friday that if the Government did not de-link social security instruments from market principles, a confrontation would be imminent. CPI(M) leader Nilotpal Basu said for the working classes, provident fund was the only social security instrument available.
PM to see what can be done on EPF
Prime Minister Manmohan Singh has said that he will discuss with Labour Minister K. Chandrasekher Rao the issue of EPF interest rate and see what can be done within the resources of the EPF organisation. Addressing the 40th session of the Indian Labour Conference in New Delhi on Friday, December 9, he said fall in the rate reduced returns to individuals causing hardship, particularly to those on the lowest rung of society.
Making out a strong case for pushing forward Labour Reforms, Dr. Manmohan Singh said a more flexible and transparent regime of laws including Labour Laws would contribute to increase employment. Calling upon Industry and Labour to work together in removing hurdles to faster economic growth, the Prime Minister said policies that had outlived their original purpose need to be reviewed.
In a related development, hundreds of trade union activists and workers from the unorganised sector assembled in New Delhi on December 8 to demand enactment of comprehensive legislation on Labour Rights. A resolution adopted at the rally expressed resentment over what it called the inaction of the UPA Government in taking steps to enact the comprehensive legislation, a commitment under the common minimum programme.
Observers say that the Finance Ministry’s mid-term review of the economy presented in Parliament last week contains quite a few policy prescription that can further incense the Left. Among these is the assertion that additional investments in the textile sector would be facilitated by reforms in labour laws.
The point about labour laws is reiterated later, this time couched in the economic jargon of “flexible factor markets” while spelling out the steps needed to boost exports. The chapter dealing with prospects and policy issues also calls for reforms in the coal sector, including FDI and opening up coal mining to the private sector without the restriction of captive mining.
Another red rag could be the hint that “the need for further pass-through of international oil prices remains,” a subject that has never failed to generate heat : the Left has always opposed attempts to hike oil prices.
In the meantime, the CPI(M) has again spoken of its opposition to allowing foreign direct investment (FDI) in the retail sector. Addressing a seminar in New Delhi on December 7, CPI-M general secretary Prakash Karat said, FDI in retail would jeopardise the livelihood of nearly four crore people.
On disinvestment of PSUs, Karat said the Government must have a comprehensive plan for mobilisation of resources for modernisation and upgradation of state-owned companies. He said he was open to holding discussions on improving airport infrastructudre through private sector participation. But he expressed regret over the fact that 57 centrally owned public sector undertakings, which had been making profits in the last 15 years, had not been adequately investing their cash reserves.
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