When Singapore Prime Minister Goh Chok Tong, here to receive the Nehru Award for International Undersanding, expressed his strong interest in the proposal to privatise the Delhi and Mumbai airports, the Communist Party of India (Marxist) Sitaram Yechury looked at him and asked quite sweetly, "By the way, Mr Prime Minister , who is the owner of Singapore airport?"

Goh did not pursue the subject. Singapore Airport is owned by the Government as are most other modern airports around the world. While he managed to silence Goh, the Left has not been successful so far in convincing the Congress to desist from hiking the FDI limit in the aviation, telecom and insurance sectors, which the Finance Minister had announced in his Budget speech.

Last week, Yechury talked tough in order to drive his message home. The Left could not only bark, it could also bite, he told a TV channel. This triggered off speculative buzz in political circles about the longevity of the ruling coalition.

The reformists' lobby urged the Government to call the Left's bluff. They know that at the end of the day, the Left is not likely to bring down the government and facilitate the return of the BJP.

Finance Minister P. Chidambaram was aware of the Left's views on the FDI hike, when he announced his controversial proposals. He had called CPM Politburo member Prakash Karat and CPI General Secretary A.B. Baradhan to North Block for consultations and both had conveyed their reservations to him. Yet, the government decided to go ahead.

Fact is, through the FDI proposals, the Congress had sought to send a signal to the world that India had not deviated from the path of reforms. The message was delivered on the eve of US Deputy Secretary of State Richard Armitage's visit to India. UPA leaders explained, in private of course, that the message was also intended for the Communist parties that the Left could not prevent the process of reforms.

Yet the Congress has to tread carefully. It has to be wary of acquiring a pro-rich image which proved to be the BJP's undoing.

Chidambaram has given into the stock brokers' lobby and announced an amendment in the transaction tax on securities. He cannot totally reject the Left's concerns, many of them legitimate, that the privatisation of the airports or the enhancement of the FDI limits could compromise national security.

The BJP could not go ahead with hiking the FDI limits in the telecom sector to 74 per cent because of the reservations voiced by the intelligence agencies, and Arun Shourie admitted this in Parliament.

The Government, which has to do a tight rope walk, will have to evolve a compromise package. Even as Chidambaram chose to circumvent the controversy in his reply to the Budget debate, saying that he would talk to the Left "sweetly" and "try and convince them", it is clear that the Government will have to drop its plans to open the insurance further to foreign direct investment but it may decide to go ahead with its plans on hiking the FDI limits in telecom and civil aviation.

The Finance Minister had proposed a hike in the FDI limit in telecom from 49 per cent to 74 per cent, in civil aviation from 40 per cent to 49 per cent and in insurance from 26 per cent to 49 per cent.

In any case, the hike in insurance entails legislative action and an amendment in the Insurance Regulatory Development Authority Act.

It will not be possible to push this through because the UPA, without the support of the Left parties, does not have the requisite numbers in Parliament. Initially the BJP had indicated that it might support the government since it had first mooted the insurance bill. But it has changed its stance and does not want to yield the opposition space to the Left.

The Samajwadi Party is also all set to oppose the move. As far as telecom and aviation go, all the Government needs to do is to table an amended version of the policy in Parliament. It requires no voting.

The Left has known all along that the Congress will take many decisions which may not be palatable to it. That is one reason why the CPM decided against joining a government it would be unable to influence decisively.

Though the UPA and the Left have decided to set up another mechanism for coordination to sort out contentious issues like the FDI hike, both have their constituencies to safeguard, and elections are due in Kerala and West Bengal in 2006.

While Yechury held out the "bite" threat, senior Union Minister Priya Ranjan Das Munshi was equally tough in his response. He challenged the Left to go ahead and pull down the government, which, he said, was not there at the Left's mercy.

Despite these exchanges, there has been give and take between the two sides. The Left went along with the Government's decision to hike the price of crude oil, despite its earlier opposition. The Congress on the other hand deferred to the Left's demand and dismantled the Disinvestment Ministry.

The Left parties are an integral part of the Mandate 2004. The truth is that it is not possible to have a government in the 14th Lok Sabha without their participation unless the Congress and the BJP join hands.

Both the Congress and the Left can be expected to play the politics of brinkmanship to increase their political space. The Left is not likely to rock the boat. In some way its commitment to secularism is greater than its opposition to economic reforms. However, an open and continuous criticism of the government, or forcing it to rollback its policies, can dent its credibility.

The situation was aptly summed up by a senior Communist leader: "We will continue to oppose these policies, they will try and enforce them. It will go on like this. That is the dialectics of the situation."

By Neerja Chowdhury

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Left unlikely to rock Congress boat