New Delhi: Left parties, providing crucial support to the UPA (United Progressive Alliance) Government from outside, today (Jul 8, 2004) broadly welcomed the general direction of the Budget but opposed the hike in FDI (Foreign Direct Investment) cap in telecom, insurance and civil aviation sectors.

Leaders of CPM (Communist Party Marxist), CPI (Communist Party of India), RSP (Revolutionary Socialist Party) and Forward Bloc also opposed the raising of investment ceiling for foreign institutional investors (FIIs) in debt funds from $ one billion to $ 1.75 billion.

Opposing the hike in FDI cap in the three sectors, CPM leaders Nilotpal Basu, Rupchand Pal and Basudeb Acharia said while the insurance sector "does not need infusion of funds", private investment in the telecom sector has so far not addressed the concerns of rural telephony.

The ratio of rural and urban tele-density currently stood at 1:11 and the rural-urban inequity has accelerated in the past five years, they said. On the Civil Aviation sector where the FDI cap was hiked from 40 to 49 per cent recently, Basu said nowhere in the world was the FDI cap in this sector as high as 49 per cent.

Expressing "serious reservation" over raising the FDI limits, Pal said the Indian insurance industry, which was already under pressure, does not need capital infusion as lot of resources were being generated each year.

"The money realized from insurance sector is also not being used to boost our economy," he said.

CPI's Gurudas Dasgupta and RSP leader Manoj Bhattacharya also opposed the increase in FDI cap in these sectors.