Friction in the alliance

The United Progressive Alliance and the Left parties position themselves for a fight on the issue of the interest rate cut on Employees Provident Fund.

in New Delhi

THE United Progressive Alliance government is in for tough times on the Employees Provident Fund issue, with the Left parties being extremely unhappy with its decision to reduce the interest rate on EPF deposits by 1 percent. However, the issue does not seem likely to jeopardise the government.

The Left parties took the government to task in the Lok Sabha on August 17 for the "anti-worker" decision through a calling attention motion brought in by Gurudas Dasgupta, the leader of the Communist Party of India (CPI). He accused the UPA government of "following the legacy of the previous National Democratic Alliance government". He reminded the government that the EPF was the only social security benefit for lakhs of workers. Gurudas Dasgupta said that the government had actually gone a step more than the NDA by ignoring the tradition of taking decisions by consensus, especially in the face of stiff opposition from the trade unions. He argued that the decision was not based on any scientific accounting system. "There is no double entry system and no income expenditure account," hence the government had no rationale to justify the cut, he said. Referring to the Finance Minister's decision to rollback partially the turnover tax, Gurudas Dasgupta accused the government of dancing to the tune of stockbrokers while ignoring the interest of poor workers. He was supported by other Left members.

LABOUR MINISTER Sis Ram Ola, in his reply to the motion, expressed his helplessness and said that it was not in his hands to decide the interest rate. "Who am I to increase or decrease the rate? This is the job of the Finance Ministry, which has pegged it at this rate," he said, putting the ball in Finance Minister P. Chidambaram's court. In an attempt to mollify the Left members, Sis Ram Ola said that the reduction was only an "interim" measure, which would be revisited at the end of the financial year. He assured members that the interest rate would be hiked if the finance committee of the Central Board of Trustees of the EPF informed the Ministry whether there were surplus funds. This, however, did not satisfy the Left parties, especially because there was no response from the Finance Ministry throughout the debate.

The Left parties are angry particularly because they had promised in their election manifesto to increase the EPF interest rate to 12 per cent. Communist Party of India (Marxist) general secretary Harkishan Singh Surjeet said: "We will try and ensure that the UPA government functions within the framework of the Common Minimum Programme." Speaking to Frontline, he said that the matter would be discussed with Prime Minister Manmohan Singh and UPA chairperson Sonia Gandhi on August 25 when the Coordination Committee would meet. The Coordination Committee has members from the Congress and the Left parties. According to Surjeet, the Left will seek an explanation from the government on the circumstances that led to the decision to cut the interest rate. "We have openly expressed our displeasure that measures like this are not in consonance with our message to the people. Now we would like to know under what circumstances the government was forced to take this decision unilaterally," he said. He said the Left parties would impress upon the government to act within the framework of the CMP. "Since the government is being run on the basis of this document, we must respect this document. If we lose respect for this document, it will adversely affect the whole politics," Surjeet said, hinting that if it came to that, the Left could take a hard stance on the UPA's propensity to digress from the CMP. This, however, would not be on the basis of just one or two differences, he said. "Policy matters as a whole will be taken into account."

Although by not committing himself to the position taken by the Revolutionary Socialist Party and the All India Forward Bloc of withdrawing support to the government if the decision was not revoked, Surjeet said that there was no need for the government to worry yet. But he also subtly warned that the Left parties' support could not be taken for granted.

The Left would not like to topple the government. The UPA is aware of this and, therefore, its leaders are not worried about the Left's threats . "If they can, let them topple the government and pave way for an NDA-led government," said a senior Congress leader.

But, the UPA will have to perform a dexterous balancing act by keeping the Left parties satisfied and yet appease its economic constituency.