The Hindu Business Line : SP open to insurance, pension sector reforms

New Delhi, July 15 The ruling United Progressive Alliance (UPA) Government is depending on the 39-member Samajwadi Party (SP) to survive next week’s trust vote, occasioned by the withdrawal of support by the Left Parties. Excerpts from a free-wheeling interview to Business Line by the SP’s high-profile General Secretary, Mr Amar Singh:

Now that the Left has pulled out and assuming the Government wins the trust vote, can one expect reforms to be back on the agenda?

Well, unlike the Left, we (Samajwadi Party) will not make the Government’s life miserable. The only issue on which we have very strong opposition is allowing FDI in retail. On the other hand, we are open to insurance and pension sector reforms, though no formal view has been taken at the party forum. Earlier, we were being guided by the Left’s financial ideology.

Why are insisting on a windfall profit tax on private oil companies? Aren’t you clearly targeting Reliance Industries?

I am not targeting anyone and it is not a priority matter as of now. Mr Mukesh Ambani is unnecessarily panicking. When I am talking of taxing windfall profits, I am not referring to just one company or sector. The tax should be levied on anybody making abnormal profits and this would include even Mr Anil Ambani or myself and any sector, including IT.

But how exactly would you go about defining what “windfall profit” is and how tax is to be computed on it?

This is the job of the concerned ministries and economists to work out. Ideally, there should be a percentage of margin based on the companies’ balance sheet, over and above which the tax can be levied. I must stress, though, this is not a conditionality for my party extending support to the present Government. The point about Reliance Industries is that by exporting most of its products, it has been starving the domestic market of diesel and petrol. Over and above this, they have been benefiting from the Export Oriented Unit status. So while, in the case of cement, steel and sugar, the Government has been banning exports to curb inflation, for petro-products, the company is being granted a prize for exports! The Union Petroleum Minister, Mr Murli Deora, has gone on to say “what is wrong in having windfall profits?”.

Is it right on your part to take sides in the corporate battle between the Ambani brothers and even urge the Prime Minister to intervene? You have apparently sought Mr Deora’s ouster along with the Finance Minister and the Reserve Bank of India Governor...

The companies controlled by the two brothers account for five per cent of India’s gross domestic product. The ongoing war is hurting investors and the stock markets and I am certainly worried about it. Stories of my seeking the heads of people are totally baseless. It was said that I wanted the RBI Governor to go because of investigations launched against Sahara India Financial Corporation. I have nothing to do with the Sahara Group. Both myself and Ms Jaya Bachchan resigned from the board of Sahara Media three years ago. In fact, I even support extension of tenure for the present RBI Governor , if considered.

But how is it that all the issues you are raising have something or the other to do with Mr Anil Ambani’s business interests.

It is all incidental and accidental. For example, in telecom, is it not a fact that the (GSM) players such as Airtel, Vodafone and Idea Cellular have been hoarding excess spectrum? If hoarding food is a crime, why should they not be similarly penalised? And this is an issue concerning not just Mr Anil Ambani, but also raised by Mr Ratan Tata and the Telecom Regulatory Authority of India.

Isn’t increased corporate involvement in politics a matter of concern?

There is no constitutional bar on entry of businessmen in politics. If that is the case, then we would not have had Mr Viren Shah, Mr K.K. Birla, Mr R.P. Goenka, Mr Praful Patel, Mr Prem Chand Gupta in Parliament. Let the Government enact a legislation restricting businessmen from entering Parliament and I shall definitely adhere to it.