CPI(M) flays UPA coalition for country's financial situation

NEW DELHI: CPI(M) today castigated the UPA coalition for the "precarious" financial situation and sought immediate changes in economic policy, charging the government with taking the country towards a situation like the major financial crisis of 1991.

"The Prime Minister has virtually failed to tackle the situation. We demand immediate alteration of policies being pursued by the government," senior CPI(M) leader Sitaram Yechury told reporters as the party's Central Committee began a two-day meet here.

Replying to questions on the slide of Rupee, the sensex and a substantial rise in the current account deficit, he blamed the government's economic policies for the downslide of the Rupee and deterioration in all economic indicators, including the sensex.

"If this rate (of fall in the Rupee value) continues, the Rupee will soon touch Rs 80 per US dollar," he said.

The economic policies of the government "have brought the economy at the same place as we started in 1991, two decades down the line. The country was faced with a major financial crisis then," Yechury said.

In 1991, the government was close to default, with foreign exchange reserves sliding to such a point that India could barely finance three weeks' worth of imports. The country had to airlift gold reserves as a pledge with the International Monetary Fund (IMF) for a loan.

The CPI(M) also decided to strongly raise the issue of "missing files" on coal block allocation in Parliament next week and seek a reply from the Prime Minister, Yechury said.

"There are reports that coal block allocation files have gone missing. We will raise it strongly in Parliament on Monday. In an era of digitisation, how can you say that files are missing? The Prime Minister will have to reply."

Asserting that FDI was not a panacea for all economic ills, he said FDI in retail "has shown this. Not a single FDI has come in the retail trade sector. They have burnt their fingers (by allowing FDI in retail). Now they are opening up insurance and telecom sectors to FDI."