The Congress and the Left parties look set to form the next government at the Centre with widely different positions on the economy. The differences are most marked in labour reforms and divestment.

The Congress, the Communist Party of India and the Communist Party of India-Marxist have opposed the National Democratic Alliance's divestment programme.

The Congress has criticised the equating of divestment with strategic sales and has said no attempts have been made to restructure public sector undertakings to fetch better prices.

While the CPI intends to stop privatisation, the CPI(M) prefers divestment in loss-making public sector undertakings only. The CPI proposes revival, consolidation, modernisation and reform of PSUs.

The Left also proposes selective foreign investment in line with national priorities. It wants a ban on foreign investment in sectors like insurance and it is seeking a review of the telecommunications policy.

The Congress strategy is to increase investment flows, both domestic and foreign, by removing bottlenecks while maintaining a short negative list of defense-sensitive industries.

On fiscal policy, the Congress stand is broadly in favour of continuing with the existing formula of lowering import duties and direct tax rates. But the Left differs on both counts and wants higher taxes for the rich.

But the Left seems willing to soften its stance on contentious economic issues if it is part of the government at the Centre.

With the Left expected to join the government, the divestment programme is likley to be restricted and the liberalisation of foreign investment norms in key areas like telecom, retail and civil aviation affected.

The CPI(M) and the CPI in their manifestoes have promised to stop the privatisation of public sector companies. They have proposed revival, consolidation, modernisation and reform of PSUs by making the management more professional.

According to the Left Front agenda, reservation, which was in PSUs, should be continued in those already privatised. The CPI(M), however, seeks to stop the privatisation of profitable PSUs.

It has also proposed channeling foreign capital in priority areas, which are to be determined by the need of developing new production capacities and acquiring new technologies.

Both the parties have also sought to bar foreign insurance companies from entering the Indian market, while the CPI(M) has proposed a review of laws governing the telecomminications sector.

It has also promised strengthening of the Life Insurance Corporation and the General Insurance Corporation apart from reforming nationalised banks so that they can carry out their social responsibilities better. It has also planned to disallow capital account convertibility.

Labour reforms too are expected to be put on the backburner since the CPI(M) has promised to reject the recommendations of the second Labour Commission such as revoking the decision on fixed-term employment and has favoured reorganising trade unions and protecting the right to strike.

The Left is, however, in favour of attracting private investment in an attempt to push up the overall investment in the economy.

Agriculture has been identified a focus area for investment push, stress on water management system and increased subsidies for farmers, along with land reforms.

The Left's taxation policy prescription may not go down well with the middle class.

While seeking a broadening of the tax base, the CPM is in favour of raising tax rates. The Left parties have not taken the liberalisation of import norms too favourably.

Citing loss of jobs and production, they have proposed higher import duties and increased use of trade defence measures.

But both the parties seem to agree with the stance taken by the National Democratic Alliance government on multilateral trade talks and propose stronger ties with China, Brazil and South Africa in an attempt to seek greater subsidy reduction on farm products.