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Karat will lead the party as interim coordinator until the 24th party congress in April.
Politburo member Prakash Karat has urged the Congress party to put aside its 'narrow outlook' to fight the BJP.
The 69-year-old has been at the helm of the largest left party in India since the 21st Party Congress in Visakhapatnam in April 2015.
Yechury's detractors in the party are hopeful this time that a new general secretary can be brought in if Yechury's pro-Congress political line is rejected by the Party Congress.
Karat was speaking in a seminar organised to protest against amendments in the Citizenship Act.
The two student activists were arrested for allegedly distributing pro-Maoist pamphlets.
The Congress is considering a diplomat, currently on an ambassadorial appointment and keen to join politics, from Palghat.