Has the time come for the Left Front to bite, or will the Communists be content only to bark? (I hasten to add that the canine simile is that of Comrade Sitaram Yechury's making!)

Because the United Progressive Alliance ministry has just taken a decision that threatens to expose the pretensions of the Marxists -- lowering the interest rate on employee provident funds (EPF).

The interest rate on EPF used to be a healthy 12 per cent. One of the major issues raised by the Left against the National Democratic Alliance was that the Vajpayee ministry had lowered this to 9.5 percent.

Though it made perfect economic sense in an era of falling interest rates everywhere, the move was damned as a betrayal of the working classes. If I remember correctly, the Left Front even made a commitment in its manifesto to restore the rate
to 12 per cent.

Once the results of the 14th general election were in, the Left Front realised that it had a heaven-sent opportunity to put pressure on the non-BJP ministry that was sure to materialise.

I believe Comrade Bardhan of the CPI was the first off the mark, issuing a long list of demands. (The CPI, by the way, has only ten MPs in the Lok Sabha.) The first on the list was that the new ministry should not raise the price of cooking gas. The second was that no public sector undertakings should be closed, sold, or privatised in any form whatsoever. And so on and so forth.

The report card on the Manmohan Singh ministry makes very interesting reading given this history. Fuel prices were raised, and I am sure that more hikes are in the pipeline. The Government of India has refused to issue a blanket ban on privatisation; in fact, it has suggested raising the foreign direct investment limit in the crucial sectors of telecommunications, aviation, and insurance. And now, in the unkindest cut of all, the interest rate on EPF has actually been further reduced, to
8.5 percent.

Let me say that all these decisions were dictated by economic necessity. (It is sheer hypocrisy for erstwhile members of the National Democratic Alliance to suggest that they could have avoided these steps had they been in power.) But it is equally true that they fly in the face of various pronouncements made by the Left Front before, during, and after the general election.

This forces the Communists to choose between being exposed as hypocrites and opening the doors to another government.

The despair of the Left Front makes sense only when you realise that the Marxists ride to power on the back of the 'haves' in the Indian economy. The steel spine of the Left Front is the trade union movement, and these guilds are, by definition, composed of employed and organised workers. The unorganised sector lies outside the domain of the Left Front, and the unemployed are really nothing better than vote banks (at best).

The EPF schemes are run for the benefit of the organised sector, and lowering interest rates hits the membership of the trade unions. These members are now beginning to ask just what sense it makes to have a Left-supported ministry in place in Delhi if their interests are jeopardised.

These rumbles are being heard in the headquarters of the CPI-M and its sibling parties in the Left Front. There is no immediate danger of the discontent making itself felt in active politics since there is no major poll in the near future -- even the Kerala assembly election is about two years away -- but the long-term danger is quite real. (Or so the strategists in the Left Front choose to think.)

As I said, cutting the interest rate on EPF schemes is the only sensible thing to do. And even 8.5 percent is, all things considered, a very handsome figure. It is tax-free and it is still giving a better rate of return than almost any bank (where interest rates are struggling to maintain themselves at 5 percent). It would be insane even to consider a return to the old 12 percent standard. But the Left Front is boxed in by its own manifesto, and must now answer for its stupidity to its supporters in the trade unions.

But the question remains: is there anything that the Left Front can do other than to call for a token strike? Do the Communists dare to withdraw support to the United Progressive Alliance on this -- or any other -- issue? Frankly, the best
they can hope for is that P Chidambaram devises some face-saving formula. What will it be?