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Mainstream, VOL L, No 14, March 24, 2012

Ill Winds of Change?

Tuesday 27 March 2012, by Nikhil Chakravartty


A midst extraordinary effusion of anxiety and interest, the long-awaited Budget was presented to Parliament on July 24.

The anxiety over it came from the high-voltage advance publicity about the country having reached the threshold of bankruptcy from which it could be saved by that mother of all money-lenders, the IMF. And interest in the Budget was generated by the expectation that it would set the lines of modernising our economy through structural changes so that it could be integrated to the global economic momentum. In the event, a veritable campaign was initiated for the instant removal of controls and regulations which would have gladdened the hearts of Rajaji with his crusade against the licence-permit raj. In the bargain, all the familiar landmarks of our forty year journey towards economic growth were earmarked for demolition, which by itself touched off intense debate and controversies.

It was a challenging, daunting task facing the government and it brought out the prudence of the Prime Minister in harnessing the reputation and erudition of Dr Manmohan Singh for the onerous job of the Finance Minister. It has so far been a heroic undertaking for him to try to convince not only the Opposition but the ruling party, and the country at large, that the drastic changes now being prescribed by him are not at the behest of the IMF with its patent conditiona-lities which have played havoc with the economies of many countries in other parts of the world. It would be naïve on his part if he thinks that by the master stroke of his Budget he would be able to banish such misgivings about the genuine swadeshi brand of his economic package.

Even many a well-wisher of the present government would prefer to withhold any testi-monial for Manmohanomics, as revealed in the Budget proposals and other related moves, as good prescription for the country’s economic malaise, that it is not an unsuited imported medicine presented with a local label pasted on it by the erudite Finance Minister; while the critics of this new economic strategy, both in the ruling party and Opposition, will certainly brand it, as they have already begun to do, as a sell-out to the IMF.

It would be a superficial view to look at the Budget with its cosmetics in isolation from the economic strategy in its entirely. Particularly disturbing in this context is the open-door policy for foreign investments. In fact, the government’s new industrial policy takes a come-hither posture towards the multinationals, more unashamed than Ashok Mehta’s classic opening-the-womb offer. Apart from the humiliating feelings such beseeching invitation to multinationals evoke in the national ethos, the massive invasion of the multinationals will directly militate against the interests of the well-established indigenous industries which have always been an enduring pillar of support for the Congress, and the national movement in general.

Apart from the immediate consequences of the new economic strategy—the inescapable rise in prices with its attendant spread of hardship and discontent among broad masses of the public—what faces the nation today is the challenge to work out a new model of development. It sounds all very exciting to talk about docking ours into the global economy. But as the leading country in the developing world—the world of the populous South in contrast to the super-rich North—it is for India to work out a model of development that shall truly ensure social justice with technological advance, while preserving the environment of the planet so seriously threatened by the ravages of the Western predatory models of development. Our economic strategists along with our political planners have to be constantly aware of this historic responsibility. The so-called structural changes under the IMF prescription can hardly be expected to equip ourselves for it.

The winds of change must blow constantly. We have, however, to ensure that they do not become the harbinger of a cyclone of disaster for this great land of ours.

(Mainstream, July 27, 1991)

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