What’s reform, Mr PM?
By S Gurumurthy
05th October 2012 12:00 AM
When his foreign direct investment (FDI) bouquet to Walmart had put the government at risk, the Prime Minister Manmohan Singh addressed the nation on September 21 and defended the ‘reforms’. His commerce minister Anand Sharma had been going to town over the ‘reform’ in FDI in multi-brand retail. The pink media celebrated a Deepavali over ‘reforms’. A week later, on September 28, Union finance minister P Chidambaram spoke of the need for such ‘reforms’. A couple of days later, the PM asserted that ‘reforms’ were not one-off process, hinting at more ‘reforms’. The pink media roared. A day later, the Congress rose in support of ‘reforms’. Forthwith came announcement that the PM, Sonia Gandhi and Rahul Gandhi would address a rally to support ‘reforms’, and now come the ‘big ticket reform’ proposals of rise in the FDI cap on insurance from 24 per cent to 49 per cent and to put a new companies Bill before Parliament. The game plan is clear: to keep the shrill cry of ‘reforms’, ‘reforms’ and ‘reforms’ rising to drown the 2G, coalgate and other noises. However, is the hike in price of diesel ‘reform’? Or cutting back cooking gas? Or bringing in Walmart?
Take the United Progressive Alliance story of oil price ‘reforms’. After the PM had told that “no government can spend its way to prosperity”, Sonia Gandhi opposed a hike in the price of oil and advised that kerosene and LPG should not be touched (Outlook June 26, 2006). The PM succumbed. Petroleum minister Murli Deora said: “Sonia Gandhi has clearly told that poor man’s kerosene, diesel, cooking gas prices should in no case go up” despite Rs 73,500 crore under recovery (Financial Express October 28, 2006). The government obeyed. Sonia told the government ‘to cut oil prices petrol by Rs 2 and diesel by Rs 1’ (Hindu Business Line November 29, 2006) and the government obliged. “Global crude prices have doubled in a year, but “the government has not raised the domestic fuel prices on a direction from Sonia Gandhi” Murli Deora gloated in the Lok Sabha (Economic Times November 22, 2007). ‘Sonia Gandhi told a rally in Rae Bareilly that fuel prices would be reduced; the next day, the Centre cut petrol prices by Rs 5, diesel by Rs 2, and cooking gas by Rs 25 per cylinder’ (Times of India January 29, 2009). So if Sonia allows fuel price rise, it is ‘reform’. If she stops it, or cuts the price, it is for ‘aam aadmi’, not anti-reform. Could anything be more ridiculous, Mr Prime Minister?
Till now the reformers have not revealed their secret understanding of what ‘reform’ means. For fear of being dubbed by ‘reformers’ as being against reform, no one asks them what ‘reform’ means. Etymologically ‘reform’ originated in reformation movements for less church control in Christianity. In the 15th century, reform meant ‘to bring a person, institution or government away from evil course of life’ – ‘Reformed churches’ (1580s), ‘Reformed Judaism’ (1843). ‘Reform School’ (1859) (see www.etymonline.com). Economic reform postulated less state control. In a perceptive article titled ‘What Do We Mean by “Economic Reform?”’ (See: www.wallstreetpit.com) Scott Sumner, economist, wrote on September 27, 2010: ‘economic reform implicitly meant more government between 1875 and 1975, and has implicitly meant less government since. That’s how we can tell whether or not we are still in the neoliberal era.’ From after 1975, economic reform meant neo-economic liberalism — which is measured by how much economic space the government vacates for private business. But Sumner adds: ‘When the recent financial crisis first hit I was worried that it would push us toward statism, just as in the 1930s. And indeed that seems to have occurred in the US.’ So, more government in finance and economics means ‘reform’ in US today; but the US wants less government in business and finance everywhere else. So, today ‘reform’ has one meaning in the US, another in India! ‘Reform’ also means righting wrongs by deformers of the economy in the past. In India, the very deformers of the national economy for four decades quickly branded themselves as ‘reformers’ in 1991! The result is that the original deformers of yesterday masquerade as ‘reformers’ today.
To understand what ‘reform’ means, recall the early 1990s, when P V Narasimha Rao, as prime minister, was skilfully U-turning the Nehruvian socialist India that had put most economic space in government hands. See the sea of changes he brought about, without much ado. He repealed the draconian industrial licensing law that destroyed Indian entrepreneurship and the monopoly law which put a cap on the size of Indian corporates; abolished capital issue controls and brought in regulatory SEBI; instituted the National Stock Exchange and digital trading in stocks; brought about rationalisation of import tariff, excise duties and income tax; raised the FDI limits for foreign joint venture partners to 51 per cent. This integrated package reducing the government’s role in command economy illustrated economic ‘reform’.
Therefore the economic space that a government cedes to private business measures the depth of economic reforms. If the government vacates more space, it is ‘reform’; the other way round it is deform. Now test September 14 ‘reforms’ against what ‘reforms’ really are. As Sonia has allowed fuel rate rise, it is ‘reform’. If she had not, she has stood for the aam aadmi. Again, the present rise in the price of oil and cooking only prevents further deficit, that is, further deform. It is no ‘reform’ of the past wrongs. The real ‘reform’ in the oil sector is deregulation, which the Congress is terrified of.
Take FDI in multi-brand retail touted as a huge ‘reform’. It robs the trading space of Indian communities — the kutchis, nadars, chettiars, rowthers, marwaris, banias, and hundreds like them — and hands it over to multi-national corporates, the Walmarts! It is ridiculous to call this robbing Nadars and paying Walmart ‘reform’, unless ‘reform’ means replacing communities by corporates. Or doing the bidding of the US. Hillary to Obama have been openly touting for Walmart. Yet, the PM denied on September 30 that it has been done under pressure from the United States.
On June 28, some loyal Congressmen organised a meet at the Andhra Bhavan in Delhi on the 91st anniversary of Narasimha Rao, the ‘Father of Indian Economic Reforms’, as Voice of America had rightly paid homage to him. The prime minister, invited as the chief guest for the event, bunked the meeting. That measures his loyalty to the Gandhi family and his gratefulness to Rao who made him an Indian and global icon.
S Gurumurthy is a well-known commentator on political and economic issues.
HURSDAY, OCTOBER 4, 2012
Manmohan Style Reformation
New definition of REFORMATION as advocated and propagated by learned Prime Minister Mr. Manmohan Singh, learned Finance Minister Mr. Chidambram and their followers in RBI and in government is nothing but inviting foreigners to save Indian economy. Since 1991 learned economists of this country like Manmohan Singh could not solve the issue of financial crisis said to be created by Pre-1990 governments are now depending on foreigners to solve the same financial crisis aggravated by so called reformists during last two decades.
It is ironical that responsibility of treatment and rejuvenation of Indian sick economy has been given to those foreigners who have completely damaged the economic health of their own countries. Foreign destructors have become protectors of Indian economy in the eyes of Indian reformists. USA and European countries are themselves in acute financial crisis but they are good in the eyes of Indian politicians. Reformation in its new Awtar is nothing but foreign investment in India and giving all freedom to corporate houses and imposing all restrictions on Indian common men.Now India has to accept FDI oriented Indian economy as desired by Manmohan singh led UPA government.
Why?
Is it not under US pressure?
US corporate lobby and US government are extremely happy of reformatory policy decisions announcement made by the government .
It proves that FDI which was considered anti-people and anti-traders was not announced by UPA government for last eight years of rule has now been announced only under pressure of government of America .
Great Manmohan Singh who is considered as great Economist is actually working as agent of US government and as franchisee of Walmart.
US lauds reforms drive, says it will boost investment
News published in Hindustan Times
India’s recent bold reformist moves came in for praise from the US government with Treasury Secretary Timothy Geithner stating that the steps will boost investment and spur growth and income.
“The recent reforms will help provide a foundation for stronger economic growth, an increase in investment, and more widespread gains in income,” Geithner said at a joint press conference held with finance minister P Chidambaram.
Geithner echoed similar views in a meeting with business leaders at a function organised by the Confederation of Indian Industry (CII) later in the day. “I feel very encouraged by the initiatives taken by the Indian government... It's good for us that we are here this time when there is so much change in the air.” Global and domestic business leaders have been unsparing in their criticism about the government’s economic management.
Over the last few weeks, the UPA government has announced a host of measures including politically contentious decisions to allow foreign direct investment (FDI) in multi-brand retail.It also hiked diesel prices by R5 a litre and capped the sale of subsidised cooking gas to six cylinders a year for each household.
The moves had triggered howls of protest, but an the government followed with up with proposals to hike the FDI cap in insurance sector to 49% from the current 26% and has favoured FDI into the pension sector.
Geithner said that the reform initiatives would improve investment climate in India while ensuring that “gains of those growth and investments are shared more broadly by the citizen of India.”
US Federal Reserve chairman Ben Bernanke who is also in India along with Geithner to improve India to improve economic co-operation between the two countries is also scheduled to meet Reserve Bank of India governor D Subbarao.
Chidambaram said he raised the issue of latest round of monetary stimulus or quantitative easing in US with Geithner.
Geithner lauds PM's recent reform push
PM Manmohan Singh's recent steps towards economic reforms have found support from US treasury secretary Timothy Geithner.
NEW DELHI: US treasury secretary Timothy Geithner on Tuesday applauded the government's recent steps to open up the economy, saying they point "to a very promising path to improving growth outcomes for the Indian economy". Geithner, who is in India for a two-day visit, said the impact and the direction of economic reforms were very powerful.
"The recent reforms advanced by Prime Minister Manmohan Singh and by the finance minister will help provide a foundation for stronger economic growth, stronger growth in private investments, and more widespread gains in income," Geithner said. The US treasury secretary also took part in the India-US economic and financial partnership and discussed ways to strengthen bilateral economic cooperation with finance minister P Chidamabaram.
A joint statement issued after the talks said the two sides had agreed to expand cooperation to deepen capital markets and strengthen financial regulation. "We will also strengthen cooperation to combat money laundering and terrorist financing. Our work continues on infrastructure financing," it said. The joint statement said India's need for $1 trillion in the infrastructure sector offers huge investment opportunities for US businesses and investors. "We discussed ways we can further lower barriers to trade and investment to facilitate stronger growth and job creation," it added.
Reforms will restore investor confidence in Indian economy: US
News in Times of India
NEW DELHI: Encouraged by India's recent reforms initiatives, US Treasury Secretary Timothy Geithner today said these will restore confidence of global investors in the country's economy.
"I feel very encouraged by the initiatives taken by the Indian government...it's good for us that we are here this time when there is so much change in air", he said at an interactive session organised jointly by the CII and US India Business Council(USIBC).
These initiatives, Geithner said, would also help in generating more investment from around the world.
"I feel very encouraged by the initiatives taken by the Indian government...it's good for us that we are here this time when there is so much change in air", he said at an interactive session organised jointly by the CII and US India Business Council(USIBC).
These initiatives, Geithner said, would also help in generating more investment from around the world.
No comments:
Post a Comment