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Govt seeks to build CMP consensus

Wednesday 26 May 2004

NEW DELHI : The ruling coalition sought on Wednesday to iron out last minute differences with Communist parties over economic reforms as it held final talks with its allies on policies the new government would follow.

The policies, drafted into a document called the Common Minimum Programme and mostly focussing on economic issues, is due to be released on Thursday.

A draft of the policy already publicised has reaffirmed the government’s commitment to pro-growth programmes and economic reforms, but it has worried some investors over what they say is the coalition’s ambitious wish list and a glaring fiscal deficit.

Communist parties, who are not part of the government but form the largest group supporting it from outside, raised fresh objections over economic reforms and said they would seek amendments in the roadmap for governance.

"From our side, we have said subsidies on kerosene and cooking gas must continue," D Raja, national secretary of the Communist Party of India (CPI), told Reuters.

"We have said there should be no disinvestment of profit-making (state) companies," he said. "I think they will agree but there can be some disagreements."

The CPI-M, the largest block within the Left, too said there were "broad areas of disagreement" over the policy draft but added that it would not arm twist the Congress-led coalition.

A minister in Manmohan Singh’s government said he was confident the differences with the Leftists would be resolved.

"At the end of the day, everyone realises that we have to be practical and pragmatic for the smooth functioning of the coalition," the minister told Reuters on condition of anonymity.

The last minute scramble to evolve a consensus over the Common Minimum Programme came a day after Singh gave in to demands from a sulking regional ally, which was miffed over ministries allotted to it and refused to join the government.

Since winning power, the Congress has said it would continue economic reforms in Asia ’s third-largest economy, but with a "human face".

That, analysts say, translates into privatisation of only unprofitable state firms, more government spending and less deregulation in the labour market, among others.

Fears that the pace of wider economic reforms may slow down under the new government triggered a record fall in the country’s shares last week.

But the markets have since shrugged off their nervousness and recouped their losses, particularly after the appointment of P Chidambaram as Finance Minister.

See online : The Economic Times


in The Economic Times, Wednesday, May 26, 2004.

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