| Now that the wicked Stalinists have been thrown into the dustbin of history, the "unfinished business" of 2004-09 can be completed, most of it hopefully in the first 100 days. Retail should be opened up so that Tesco and Wal-Mart can move in; part of our pension funds should be invested in the dodgy stockmarket, labour laws need to be made employer-friendly; profit-making PSUs should be urgently sold; strikes and morchas require to be banned in the national interest.... Before the free market ayatollahs and pink papers start distributing laddoos and bursting crackers, I offer a word of caution. To see Election 2009 as a mandate for radical economic reforms is a gross misreading of the mandate. If anything, it is precisely the opposite. I know I run the risk of being called the S-word, socialist, but now that the Bible for FICCI and CII (The Economist) has announced the death of laissez-fare capitalism, we need to tread carefully. |
First of all, we require an honest rendition of the election results. One does not have to be a rocket scientist to conclude that the verdict is for, yes, more social sector spending and anti-poverty programmes. The much-mocked NREGS and the Rs 65,000-crore loan waiver to farmers were the real game-changers. The recent decision to extend NREGS to urban areas is politically shrewd, economically sound and morally unimpeachable. I am delighted that serious efforts are afoot to plug leakages in the delivery system. However, even with the leakages, the measures have brought about a mini rural revolution in consumer spending patterns. The pockets of farmers and labourers are not as empty as they used to be. And they are spending.
We have had economic reforms in India since 1991. The opening up has given the country unprecedented GDP growth. Alas, it has also made the rich richer and the poor poorer. If not poorer, at least without any significant improvement in their lives. The government's own figures are at once shameful and repugnant. Nearly 800 million of our citizens—many of them voted Congress—live on less than Rs 25 a day. And on the human development index, we are neck-and-neck with Rwanda and Somalia. The advocates of swift and bold reforms will tell us the answer to this unacceptable situation lies in having completely unregulated markets. The inflow of money thus generated is bound to trickle down. I ask: if it did not trickle down in 20 years, what guarantee is there that it will trickle down in the next decade? Remember, the poor vote with their feet!
I am not anti-reform. India must selectively and gradually extend the scope of reforms, but we should not be hustled by those who have benefited from and been fattened by the World Bank, the IMF and the American embassy in Delhi. I have argued previously that Messrs Yechury and Karat have a point: the Left did save India from financial ruin. Imagine our fate if our banks and insurance companies and airlines and newspapers were American-owned?
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