Money Does not Grow on Trees

PM Speech on Reforms

The tempest has set in. The magic wand is broken. We are again on the hard ground of reality. Foreign supermarkets are given a red-carpet welcome as the Congress-led UPA government has announced a string of reforms to open up the retail, aviation and other sectors to more foreign investment and cut deficit-bloating subsidies.

The PM's straight talk on TV on econonic reforms and his greater effort to reach out has created mixed reactions. People will take time to ponder over the market economy and the evils associated with it. But what frustrates us more at this critical juncture is that Dr. Singh has said nothing on the issue of corruption although corruption like a canker has eaten the vitals of national economic growth and talks of corruption has been consuming the country in the past few months. Nothing is very certain if economic reforms can be successful in a country where red tape, corruption, woeful power supplies and problems in acquiring land act as powerful deterrents to investment.

The Washington Post quoted Manisha Priyam, associate professor of politics at Delhi University and a research scholar at the London School of Economics raising the question:

“He didn’t address issues of transparency, allocation of national resources or any of the domestic reforms that everybody is demanding. Does he not have anything to say on that?”

The speech of the PM may be a mood-changer but not yet a game-changer. Economy has gone from bad to worse. But who was responsible for all these? Manmohan Singh himself has been the Prime Minister since 2004.

The decision to open up the retail market, something the U.S. government has long lobbied for, was a significant political risk for Singh. The Prime Minister wanted to assure the nation that it has enough support from other smaller, regional and caste-based parties to shore up its coalition and comfortably win any confidence vote in Parliament. But people wanted to hear from him if the Reforms could help the growth of the country and in which way?

Most Indian people now understand and support reforms through Open Market. In earlier times the Left parties created some apprehensionin the mind of the people by their continuous propaganda against Capitalism and America. But after the exit of the CPI(M) from UPA I, the left had their debacle in elections. People rejected them in West Bengal and Kerala. The last few months the Left did not intensify their campaign against new economic reforms which Singh wanted to initiate in the country.

Mamata’s opposition was more due to the CPI(M) phobia and her crusade against FDI which she recorded also in her election manifesto is also to steal the wind from the sail of the Left. The cause of the poor farmers is also her priority. People have seen how the Left parties have themselves showed some flexibility and accepted the foreign investment in many sectors. Even their participation in the bandh against FDI retail is half hearted.

It is still not much clear how the opening of FDI in retail can affect the poor farmers which even Akhilesh Yadav focused very recently before the media. He also met Mamata only the other day in Kolkata. He supported Congress for remaining in power only to keep the communal forces away from Delhi.

Economic reforms suggested by Dr. Manmohan Singh are not much important.

Question is how it is going to be done? What is done to protect the interests of an average farmer or retailer or wage-earner without destroying the only livelihood they have?

It is hard for middle-income or the rich to understand the daily lives of millions of poor Indians who sustain on bare minimum and their concerns are genuine. These folks don't have the education, disposable income, savings, steady corporate job, training, connections or hereditory assets - they live day to day with no security. And they get exploited by unscrupulous political parties of various shades of black and grey who steal the votes with lies and violence. Dr Singh knows this all too well. He should rollout measures that lays out how the interests are protected and what the poor (retailers in this case) can do to safeguard and what alternatives the government is making available at least for the near term to help bridge the gap until the poor figures out how to adjust.

It is an obligation for both the Government and the Private sector and in their best interests - having more people with decent jobs and livelihood mean more customers for the big box retailers. P.M.’s action of freeing Indian market to America or any other civilized nations is in the best interest of India. It was India's first Prime Minister Jawaharlal Nehru and his Congress Party who brought "socialism", Keynesian monetary and fiscal policy, "big government sector" enterprizes, too many government regulations, very high income tax, and such other anti-business policies - which made India a "beggar" country. Instead, if Mr. Nehru might have installed free market capitalist principles in India, then India might have been the richest country in the world.

India has seen a economic euphoria after the economic reforms initiated in the nineties. By making the country a haven of free market economy and trying to attract Wal Mart and other giant businesses to invest billions in India, bold economic measurs are being taken. There should be debates on free market and open economy concepts which even the Left too partially accepts. Today is a time for global economy. Singh said he acted in the national interest to stop "a loss of support in our economy" and asked for people's "trust, understanding and your cooperation" to avert a crisis.

The most important step is to restore the confidence of foreign investors, as "Money does not grow on trees" and that is why these decisions have been made. But the benefits will never reach the common people if the government indulges in corruption and nothing is done to fight out corruption. "At times, we need to say no to the easy option and say yes to the more difficult one" said an unfuzzed Singh. While political opponents accused Singh of selling out the country to foreign interests, the media lauded him for addressing the difficulties facing Asia's third-largest economy.

22-Sep-2012

More by : Dr. Ratan Bhattacharjee

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