Come Budget ‘06, it will be sixteen years on the trot for reforms and liberalisation, often referred to as Manmohanomics. The man who engineered this economic coup of sorts and pulled India out of its self-imposed socialist shackles is now the PM. And ironically he is presently the prisoner of the very Left whose economic philosophies of five decades that guided India’s financial fate he demolished with gusto and without guilt. In fact, Manmohan then was the Left’s favourite whipping boy accused of taking India on the path to economic doom by selling out to IMF, World Bank, MNCs etc. But the sincere Sardar always prevailed during those nervous nineties, thanks in part to the conviction and confidence he generated amidst the people and pundits alike as also to the free-hand that he was allowed by his mentor, PVN. One can, therefore, understand the Left’s mortification at having a go at him.
But the man on the Left’s firing line now is P Chidambaram, the current finance minister and Manmohan’s protege. PC is no less a financial wizard than his boss, but is also a suave politician, which his boss is still not. And so unlike Manmohan, he has to manage the politics of his economics too, particularly in the context of the polls to five States that include the Left bastions of Kerala and West Bengal looming large. The Commies would doubtless expect liberal coats of red to the Budget proposals, something no reformist FM in his senses can guarantee. Indeed, the stage looks set not just for the Budget, but subsequent roll-backs too. Of course, one can bank on PC to invoke Thiruvalluvar to justify both, the proposals as well as their withdrawal!
While one would be inclined to place Chidambaram’s financial credentials beyond reproach, his credibility surely faces severe challenges. There are no two opinions that the reforms are irreversible; any dissent, even the Left’s, could only be about the method, particularly timing and speed. There is also no denying that the liberalisation over a decade and a half, has not only integrated India into the global economy, but also established it as a rising star in the eyes of the international community. It is quite apparent, even without resorting to jargon and jugglery, that by all indicators, the economy is booming and set to continue its push forward, whatever the regime at the Centre; the inhibiting factors could only come from overseas, for instance oil prices. Indeed, India is shining like the full moon. But look closer and the craters are all too visible. And if PC is not beware he may trip on them!
Three significant, rather, sinister, disparities come to mind. No FM can claim true success, whatever his ability, if these are not addressed. First is the deepening urban-rural divide. The Indian economy, which hitherto was savings-driven is increasingly becoming consumption-driven, like the West. And conspicuous consumption is a character of the urbanites, the rural poor, particularly the farmers, playing no part in it. Despite sixty years of stifling socialism first and calibrated capitalism later, the farmer’s plight has only deteriorated, contrary to promises and claims. His alienation is rendered more tragic owing to singular lack of awareness of his condition amidst the ‘shining’ India. What little is covered by the media of his problems is extremely disturbing. Suicide rates are reigning high and all set to escalate, if some studies are to be believed. Cooperative banking, touted as his saviour, is slowly and steadily strangulating him and his progeny too. If floods don’t get him, droughts will. The Cola companies that quench the throats of the urbanites are parching their lands to no end, depleting the scarce groundwater and pushing them into more investments for irrigation and into more debt. In all, he harvests woes and nothing else. How can the country have a clean conscience when those who feed it are dying of starvation?
The second disturbing phenomenon is the total isolation and eclipse of the small operator, from stock markets to real estate, to virtually all kinds of business, agencies and services. Driven by bottomless money bags, egged on by an elitist pink media and backed by lobbies and pressure groups it is the big players, who alone appear to have the ears of the powers that be. With almost every vocation of theirs getting ‘institutionalised’ or ‘corporatised’, and sharks wading into their domain, the small fish hardly have any breathing space. Now, this is no call for reservations, but in the context of the lofty rhetoric on rationalisation of the business rules, clearly the dice is loaded against the small timer. Fortune favours the Big!
And the most glaring schism is the one between the public and the politicos. While the common man is hounded and rounded up even for petty monetary indiscretions, the politicians get away with mind-boggling financial improprieties. While the ordinary citizen is meticulously scrutinised to plug ‘revenue leaks’, the sleaze money of the politicos flows through the system in gallons, unchecked and unaccounted. Where is equity and even-handedness in such a system? What credibility can one attach to a tax regime in which the honest are not trusted, while the unscrupulous are indulged? Or are they privileged just because they belong to the FM’s fraternity? The black economy virtually runs parallel to the accounted one in size. The shrewd FM surely knows that it is his ilk which controls a great bulk of that. Both elementary financial prudence and the highest call of national duty demand he act against them. That would bridge both the fiscal deficit as well as the moral deficit.
Indeed, given the buoyant and feel-good mood in the economy, these are raised not to make a case for PC to shut down, but rather to reboot and reformat!
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