For CPM, stock mkt evil for ‘aam admi’, great for party

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.

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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.