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Mainstream, VOL L No 42, October 6, 2012

Behind Second Round of Big-ticket Reforms

Editorial

Thursday 11 October 2012, by SC

The massive countrywide bandh of September 20 against the UPA Government’s decisions to hike diesel prices, cut subsidy in cooking gas as well as introduce 51 per cent FDI in multi-brand retail and 49 per cent FDI in aviation obviously has had no impact on the Manmohan Singh dispensation at the Centre. Or else it would not have gone ahead to carry out a second bagful of big-ticket reforms today.

The latest decisions of the Union Cabinet (which would however have to await Parliament’s approval in its winter session) include hiking the FDI cap in insurance from 26 per cent to 49 per cent, intro-ducing FDI in pension funds and putting the FDI cap in this at par with that in insurance (that is, 49 per cent—more than what had been anticipated).

Predictably these steps have been warmly welcomed by India Inc. But these have triggered instant and vehement opposition from the Opposition as a whole, from the Left to the BJP; and the erstwhile ally of the Congress in the UPA, the Trinamul Congress, has assailed the government in no uncertain terms. Whatever the wholehearted supporters of the PM may say, those even in the Congress capable of comprehending the public mood know that it would be an uphill task for Manmohan Singh and his colleagues to get these decisions adopted in Parliament.

This brings us to the question: what impelled the PM to go for these reforms that would decidedly have a negative effect on the aam aadmi? The answer is simple: to disprove the US allegations of UPA 2’s policy paralysis and under-achievement by Manmohan Singh. And also to ensure that India’s ratings in the West are not downgraded. The whole exercise is a direct message to Washington on UPA 2’s “basic intention”. In the process what is becoming as transparent as daylight is that the Congress, which had come to power in 2004 (and retained it in 2009) with the promise to defend the interests of the aam aadmi, is now feverishly engaged in promoting the markets and furthering the profit-incentives of the corporates and foreign investors to the detriment of the aam aadmi. The logic of guaranteeing huge capital flows by placating the foreign investor in this way so as to fund social welfare programmes is totally unfounded and such propaganda is just an eyewash. What the Union Government is pursuing is a neo-liberal programme of action which guards against taxing the rich to help the poor thereby aggravating socio-economic disparities which, facts irrefutably show, were far less than what they are today in the days of Jawaharlal Nehru and his daughter both of whose policies associated with the ‘growth with equity’ project are an anathema to the current exponents of the liberalisation-privatisation-globalisation (LPG) agenda.

Come elections, the people of India—the marginalised, underprivileged majority of the electorate—will give a fitting reply to this foreign-inspired strategy that goes against the fundamental tenets of the Congress tradition the contemporary leaders of the party have voluntarily chosen to abandon.

October 4 S.C.

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