The Communist Party of India (Marxist) is proving to be a master of disguises. And it is becoming increasingly difficult to tell its various images from the real thing. Its General Secretary Prakash Karat and politburo member Sitaram Yechury have declared that they'll interpret any reverses suffered by the Congress in the ongoing Assembly elections to five states as a popular rejection of its pro-reforms economic line and pro-us foreign policy tilt. This meant, in effect, that they were placing the government on notice. In the firing line: privatisation of the Mumbai and Delhi airports, the much-awaited "flexible" labour policy and the proposed increase in the foreign investment cap in the insurance sector.

Six months ago, such a statement would have resulted in a stock market crash. This time, they were barely noticed, testament, perhaps, to the fact that the flow of events has overtaken these leaders. Even senior leaders in their own party have started taking such rhetoric with large doses of salt. "They have their compulsions in Delhi," says a senior Marxist leader in West Bengal, "but we have to face the electorate and win elections, so we can't be so dogmatic." The clear inference: pro-reforms Left leaders will not let central leaders translate their radicalism into punitive action.

The premise of Messrs Karat's and Yechury's argument-that the Congress will suffer reverses in these polls because of its alleged pro-reforms, pro-us policies-is also unsound. Of the states going to polls, the Congress is in power in three-Assam, Kerala and Pondicherry-and a basket case in Tamil Nadu and West Bengal. Everyone is unanimous that it will retain Assam and Pondicherry, cede power in Kerala and remain an also-ran in the other two. The Left, for its part, will retain West Bengal, wrest Kerala and watch from the sidelines in the rest. Kerala has a history of kicking incumbent governments out of office; so a Congress defeat can hardly be interpreted as a vote against reforms. But the Left will definitely try to give it this spin. "We feel that the central government is deviating from the Common Minimum Programme. A victory in Kerala will give us a good platform to voice our dissent," says senior CPI(M) leader Thomas Isaac, who is considered Kerala's shadow finance minister. Shadow chief minister V.S. Achutanandan is an old-school Marxist and will back the hardliners, but his reformist party rival Pinaryari Vijayan will almost certainly keep him tied to the state, leaving him with little space to play any role in the formulation of his party's national strategy. This means the party's anti-reforms thrust will be somewhat blunted.

In Tamil Nadu, both the AIADMK- and DMK-led fronts have supported or opposed reforms based on their immediate political compulsions. A victory for either party, therefore, cannot by any stretch be interpreted as a vote against the Centre's policies.

That brings us to West Bengal. Here, Chief Minister Buddhadeb Bhattacharjee has overturned decades of communist orthodoxy and is pulling out all stops to welcome foreign and private investments. He has publicly opposed the agitation against the privatisation of airports, signed agreements to hand over farm land to Indonesia's Salim Group for a housing project and, hold your breath, declared that Karl Marx and socialism are no longer relevant. The cm has also made it plain that he's seeking re-election on the plank of his own version of economic reforms (which, incidentally, is almost a carbon copy of the one scripted by Prime Minister Manmohan Singh in Delhi). His opponent, Mamata Banerjee, on the other hand, is spouting the old Marxist slogans against reforms and foreign investments. Thus, only a defeat for the Left, rather than a victory, can, logically be termed an anti-reform vote. And Bhattacharjee and his colleagues are bound to interpret their return to power as a vote for reforms and push ahead with the next stage of their agenda.

"They (the central leadership) will launch agitations and indulge in brinkmanship. But I don't think they'll actually withdraw support," the senior West Bengal leader sums up.

-additional reporting by Ritwik Mukherjee and Rahul Sachitanand

INSTAN TIP
The fortnight's burning question.

Suzuki Motor CEO Osamu Suzuki says Ratan Tata's proposed Rs 1-lakh car is not feasible. Is Tata's dream practical or is he only chasing a chimera?

No comment. Ravi Kant, Managing Director, Tata Motors

I do not want to comment on what Mr Suzuki said about the project. All I can tell you is that we are doing whatever we have to do.

Yes, Dilip Chhabria, Promoter, DC Design

Mr Tata has staked a lot on this project, and I guess he can do it. However, I believe that he will need to change the paradigm of not only how cars are manufactured, but also the business processes around it.

Maybe. Rajeev Chaba, President & MD, General Motors India

You cannot rule anything out, but given the current duty structures and regulations in India, I think it will be very difficult for a manufacturer to make a car at such a price point.

-Compiled by Kushan Mitra

Q&A
"We Are Setting Up An ARC For SMEs"

Two years ago, centurion bank was on the verge of collapse. But Rana Talwar and his team turned it around in quick time. Its merger with the Bank of Punjab brought it a lucrative SME (small and medium enterprises) portfolio and a low cost deposit base. The Centurion Bank of Punjab, as it is now called, is aggressively scouting for another buyout in the south or west, though the bank is tight-lipped about it. Shailendra Bhandari, MD & CEO spoke to BT's Anand Adhikari about his new business initiatives. Excerpts:

What new initiatives are you planning?

We have just launched our credit card, called Miracle, and the response has been quite encouraging. We are now awaiting RBI's permission to start an asset reconstruction company (ARC) to buy stressed assets.

What's the potential of the ARC business?

We will focus on stressed assets of small and medium businesses. Players like ARCIL are focussing on the stressed assets of big players. We are better positioned to exploit the lower end of the market.

How is your bank coping with the rising interest rate scenario?

We have one of the highest interest margins, of 4.8 per cent, in the industry. We are also tapping low cost deposits and expanding our fee-based business portfolio by hawking insurance and other financial products.