Eco stimulus not enough to ward off crisis: Yechury

Economy Bureau
Posted: Tuesday, Dec 30, 2008 at 2325 hrs IST
Updated: Tuesday, Dec 30, 2008 at 2325 hrs IST

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Kolkata: The economic stimulus announced by the central government is not enough to help India bounce back from the present crisis, said CPI (M) politburo member Sitaram Yechury. He dismissed former Union finance minister P Chidambaram’s comment that the country will be able to fight recession in the middle of the next fiscal through financial stimulus.

While China will be investing $586 billion as public investment, the Indian prime minister has announced an investment of only Rs 20,000 crore ($4 billion), which Yechury feels is not enough for the bailout.

At an interactive session on Indian economy, organised by the Bharat Chamber of Commerce in the city on Monday, Yechury once again voiced his protest against the Insurance Bill which proposes to raise the FDI cap in private insurance to 49% from the current limit of 26% . He said that increasing participation of the foreign direct investment in the insurance sector is not desirable.

The bill, according to the Left party, is aimed to resurrect the bankrupt US insurance industry, and does not serve the interest of the country.

“Domestic insurance companies have the capacity to raise Rs 6,50,000 crore. This is a very good source of funds for spending on infrastructure. If foreign firms are allowed to raise stake, they can decide to take the funds to other destinations to maximise profit,” Yechury said.

As measures to tackle the economic meltdown in India, Yechury suggested ‘to put pressure on the Union government for a massive public investment programme. The government needs to create infrastructure projects that, in turn, would generate employment.”

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