Stock market bad for aam aadmi, good for CPIM

For CPM, stock mkt evil for 'aam admi', great for partyNew Delhi, October 1 An article by CPM General Secretary Prakash Karat last week came down heavily on the new pension scheme of the Government saying it would siphon off thousands of crores earned by employees to the speculative stockmarket with no assured returns. The argument: the stockmarket, capitalism’s seamy showcase, has to be avoided. But not when it comes to the CPM’s own cash reserve. While the party has opened an amusement park and is planning to enter the hotel business, it has also invested a substantial amount of its income in mutual funds that invest in stocks. So, even comrades cannot resist the lure of better returns. Income tax returns filed by the party from 2002 to 2006 show it has earned a substantial amount from interest and dividends: Rs 1.88 crore (2002), Rs 1.17 crore (2003), Rs 2.10 crore (2004), Rs 2.15 crore (2005) and Rs 1.92 crore (2006). “We have invested in mutual funds because we get better returns than banks. But we have only invested in public sector funds like the Unit Trust of India,” senior Politburo member M K Pandhe told 'The Indian Express'. He declined to mention what share of the income came from mutual funds. Doesn’t matter that in the portfolio of UTI Equity Fund, for example, PSUs are not exactly at the top. As of July 31, 2008, the fund’s portfolio included Reliance Industries, Glaxosmithkline, Reliance Communications, Tata Tea, TCS, Infosys and Shoppers Stop. Isn’t this doublespeak? “Banks also invest in stock markets. How can we stop that? As long as we are working in a capitalist system, we will have to be part of the system,” Pandhe said.Stock market bad for aam aadmi, good for CPIMAN article by CPI(M) general secretary Prakash Karat last week came down heavily on the new pension scheme of the Government, saying it would lead to thousands of crores of rupees of the employees going into the speculative stock market. His concern was that no regulatory authority can stop wild fluctuations in stock markets and the scheme does not assure a minimum return to employees. The party had adopted a similar line when the Government decided to hand over the management of the Employees Provident Fund to private mutual fund (MF) companies. The argument: stock market is speculative. But while the CPI(M) has a dislike for the speculative stock markets, it seems to have no ideological qualms in taking the MF route to get better returns for its own cash reserve. While the party has opened an amusement park and is planning to enter into hotel business, it has also invested a substantial amount of its income in MFs, which ultimately goes into the stock markets. It seems even the comrades cannot resist the lure of better returns. The income tax returns filed by the CPI(M) from 2002 to 2006 shows it has earned a substantial amount from interests and dividends. A break-up of income that party got from interests and dividends as per the records filed by it — Rs1.88 crore (2002), Rs 1.17 crore (2003), Rs 2.10 crore (2004), Rs 2.15 crore (2005) and Rs 1.92 crore (2006). “We have invested in mu tual funds because we get better returns than banks. But we have only invested in public sector PSUs like the Unit Trust of India,” confirms Politburo member M K Pandhe. However, it is not clear how much the party has invested in MFs. But then the party hates stock markets, doesn’t it? “Banks also invest in stock markets. How can we stop that? As long as we are working in a capitalist system, one will have to be part of the system,” Pandhe told The Indian Express. “When the Industrial Disputes Act was proposed, we opposed it. We had observed the day the Bill was passed as black day. But once it came into force, when it became the law of the land, we adhere to it. We have to go by the law,” he added drawing a parallel. According to the returns filed, the CPI(M)’s total earnings in 2006 was Rs 41.60 crore, a 150 per cent increase from its income four years ago. The party’s income was Rs 20.06 crore in 2002. The majority of the CPI(M)’s income comes from voluntary contributions and levy paid by party leaders. The party received Rs 17.90 crore in voluntary contributions and Rs 16.77 crore in levy in 2006. All party MPs, MLAs, ministers and leaders have to pay levy, a portion of the salary they earn. Marxists tracking Sensex makes FM happyThe CPI(M), which showed concern over the crash in the stock market, was today cornered in the Rajya Sabha by Finance Minister P Chidambaram, who said he was happy that the Marxists were keenly tracking the Sensex."I am glad you are looking at the stock market. There is a substantial CPI(M) investment in the stock market," Chidambaram said replying to the debate on Appropriation Bill.Chidambaram had a dig at the Left party members when one of them asked him why the stock market was melting if the fundamentals of the economy are strong.In a lighter vein, the Finance Minister said he knew the kind of money that the CPI(M) had made from the share market. "You made Rs 1.9 crore," Chidambaram said adding, he was happy for that.When Sitaram Yechury asked Chidambaram to give the "devil (Left) its due" for saving the country from the global financial turmoil, the Finance Minister said the Congress-led UPA government had neither embraced capitalism nor communism."We have never embraced capitalism nor communism. Congress party and the UPA have a particular philosophy which would be in tune with changing times," he said.The House witnessed friendly duel between Chidambaram and Yechury over how the erstwhile Left supporters of the UPA had allowed the government to go ahead with NTPC disinvestment while blocking the similar moves for BHEL.The government had disinvested close to ten per cent in NTPC and wanted other PSUs to follow the suit.Chidambaram said the "same devil" supported the government's move to disinvest in NTPC but not in BHEL.The Finance Minister also took potshots at Yechury saying that the CPI(M) leader gave an impression as if he was running for the US Presidential elections."I thought he (Yechury) was running as the third candidate in US elections. He might have become President of US and declare America as a Marxist country," Chidambaram said evoking laughter in the House