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CPI(M) 2014 Manifesto: Against FDI; Media Regulator, Open Source, Internet Out of US Hands

cpi-manifestoFrom a Digital ecosystem perspective, the CPI (M) Manifesto makes some of the right noises, but broadly suggests that the role of government needs to be increased, with greater participation from the public sector, reduction in FDI, . The manifesto is largely a rant against neo-liberal policies from the 6 years of BJP rule and 10 years of Congress rule, saying that the pursiot of neo-liberal policies “need to be reversed. What is required are alternative economic policies in the interests of the people and the country.

Some key policy changes that might have an impact on the digital industry:

1. Foreign Direct Investment:
– Prohibiting FDI in Retail Trade: “The FDI in multi-brand retail is a graphic example of how the interests of Walmart and other foreign supermarket chains supersede the livelihood and employment of 4 crore (40 million) people in retail trade in India. To start with this executive decision has to be scrapped and FDI policy governed by the interests of national sovereignty, priorities of national development and the employment needs of the people.”
– Reversing the entry of FDI in the print and electronic media
– Reversing FDI guidelines to prevent backdoor entry of FDI and prevent FDI through acquisition route of domestic industries.
– Foreign capital to be channelled for building productive capacities and acquiring new technology
– No FDI in higher education; Scrapping Bills such as “Foreign Educational Institutions (Regulation of Entry and Operations) Bill, 2010”, “The Higher Education and Research Bill (THER) 2011”, and “Universities for Research and Innovation Bill, 2012”
– Re-imposing controls on the outflow and inflow of finance capital
– Plug the Mauritius route by reviewing Double Taxation Avoidance Agreement with Mauritius and other countries Corporate profit tax should be increased by increasing statutory rates so that effective tax rates are not low causing huge loss of revenue
– Taxation of capital gains from the international transfer of shares in foreign company with underlying assets in India
– Withdrawing the proposal to increase the FDI cap in the insurance sector from 26 to 49%

MediaNama’s take: The anti-FDI approach is a natural one for the CPI (M), but this policy is far too insular and focuses on substituting reduction in foreign investment with an increase in government spending and an increases in taxes for the rich. While greater oversight and transparency in terms of inflow and outflow of capital would be welcome, especially taking another look at the Mauritius route for investment, and taxation of capital gains from sale of businesses internationally, with underlying assets in India, is a tricky situation. It would prevent companies from investing in India.

What we disagree with most is the stand against FDI in retail trade, and prevention of FDI through acquisition of domestic industries: it destroys an important incentive structure, necessary to build businesses. This would mean lower job creation from the private sector, less money flowing in, and slower growth in business. Reduction in competition would lend itself to fewer choices for customers.

We also disagree with the stand against FDI in print and electronic media: these industries need funds, and competition helps them serve better content to their readers. The jurisdiction issues around the Internet are tricky, and would, for example, the Huffington Post setting up a site targeting India be covered by this rule? Will we start blocking content from companies not registered in India, but serving content here?

2. Telecom & Internet
– Changing telecom policies to promote telecom penetration and connectivity in rural areas;
– Increasing broadband penetration and universal access to Internet
– Taking Internet governance out of US control to an appropriate international body; promoting a people-centric Internet which builds in social justice and free from control of global corporations; promoting a global Internet regime that protects the right to privacy and does not allow mass surveillance by either governments
– Pursuing policies for de-militarisation of cyber space

MediaNama’s take: There is no clear policy outlined for a struggling telecom sector, which has borne much of the brunt of the UPA’s policies of financing fiscal deficit through expensive auctions. The money raised doesn’t get plowed back into the telecom sector, and there is little to show, in terms of infrastructure development through the Bharat Broadband project. There is no clear policy outlined for increasing broadband penetration and providing access to the Internet: whether in terms of unbundling the local loop, allowing spectrum trading, converting post offices into cyber cafes, encouraging (or even mandating) introduction of local language interface for devices brought into India, among other things. The least we would have expected of the CPI(M) would be to ensure the neutrality of networks, so commercial considerations don’t dictate which website gets preferential bandwidth allocation, but even that is missing.

We agree with the party’s stand on right to privacy, and against mass surveillance, as well as the move to take Internet governance out of US control.

Most intriguing is the statement that they would look to demilitarize cyberspace. Is that even possible?

3. Aadhaar
– Deliver twelve LPG cylinders at subsidized rates as earlier with no linkages with Aadhaar
– Stop implementation of the Aadhaar project till it is approved by Parliament; initiating a privacy law and a data protection law to be passed by Parliament prior to implementation of Aadhaar
– Barring the use of Aadhaar in the provision of social services and reversing all decisions to make Aadhaar compulsory for the provision of any rights, economic and social services to citizens
– Constituting an independent high level expert panel for an appraisal of the technology of biometrics used in the project

MediaNama’s take: We agree with the CPI(M)’s policy around Aadhaar. It protects civil liberties, and makes the program opt-in, rather than forced opt-in.

Also read: Congress (I) 2014 Manifesto: Right To Entrepreneurship, Retroactive Tax, Banking For All & More

4. Media

– Strengthening the Prasar Bharati Corporation to make it a genuine public broadcasting service for TV and radio; States to have a say in the programmes aired by the public broadcasting service
– Prohibiting cross-media ownership to prevent monopolies
– Setting up of a Media Council which can act as an independent regulatory authority for the media

MediaNama’s take: Setting up a media regulator is an unwelcome move, because it takes us down the slippery slope of content regulation. There is to indication that the scope of a media regulator won’t be expanded to also include the Internet, which would have a chilling effect on free speech. Prohibiting cross-media ownership is also a tricky issue, since media businesses need to leverage economies of scale with the nature of the industry.

5. Science and Technology
– Enhancing public funding of indigenous research in science and technology to 2 % of GDP as against 0.8% to promote self-reliance; strengthening the university system in research and development
– Fundamental research in the sciences to be accorded priority
– New initiatives with adequate funding in emerging technologies such as solar
– Create capability in electronics, including microelectronics
– Promoting free software and other such new technologies, which are free from monopoly ownership through copyrights or patents & knowledge commons should be promoted across disciplines, like biotechnology and drug discovery

MediaNama’s Take: public funding for research is welcome, but there must also be a move to encourage private funding. No clear policy is outlined for enabling this, or other initiatives mentioned in the manifesto.

We do like the approach for promoting free software, but copyright and patents have their own role to play, in terms of incentivising innovation.

6. IPR

– Reviewing existing Free Trade Agreements (FTAs); Reconsider the FTA negotiations with EU and EFTA in view of their pressures on IPR issues, opening up of Banking and – Revamping the functioning of the Patent offices to ensure strict adherence to the Indian Patent Act; Stop training and orientation of Indian Patent office personnel by the US and European Patent officesInsurance, etc.
– Defend India’s patent laws and ensure no dilution

7. Retail
– Licensing of corporate retailers: Regulating domestic corporate retailers through a licensing policy
– Favour the production of goods for mass consumption and not unsustainable luxury goods

MediaNama’s Take: Bad moves, both. Corporate retail businesses bring in efficiencies and address fragmention can lead to higher prices. Luxury goods have their own role to play, in terms of improving standards of living, and once economies of scale kick in, can become mass. A mobile phone was a luxury good at one point in time.

8. Taxation:

– Enlarge the resource base by taxing the rich, corporate profits, crackdown on tax evaders, black money, money laundering, higher taxes on luxury goods, thereby generating resources for growth
– GST to be implemented only after ensuring a higher rate for the states so as to at least partially correct the present fiscal imbalance

9. Other plans

– Immediately halting the process of issuing fresh licenses for banks in the private sector and review of the Banking Regulation (Amendment) Act 2012;
– Halt any further dilution of Government equity in public sector banks and strengthen the public sector in banking and insurance with strict adherence to priority sector lending norms.
– All regulatory authorities of the financial sector should be accountable to Parliament and legislative oversight.
– Increasing public investment in infrastructure; Adequate Plan outlays for power, communications, railways, roads, ports and airports

– Manufacturing sector growth to be given priority through a long term industrial policy that strategize investment, creates incentives for employment generation
– Creating a national policy framework to set minimum norms and standards for setting up industries in the states so that competition between states would not drive a race to the bottom
– Complete halt to disinvestment and privatisation of profit-making and potentially viable PSUs
– Amending SEZ Act and Rules to do away with myriad tax concessions and regulate land-use; Ensuring strict implementation of labour laws in all SEZs
– Protecting of domestic industry from indiscriminate lowering of import duties and takeover of existing Indian companies by foreign companies; Encouraging the private sector to invest in manufacturing and services sectors; providing incentives to the private sector linked to job creation and R&D efforts

Download the manifesto here.

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