
The Indian Express

The Financial Express

Latest News

Screen

Express Computer

Expresswheels
 Travel

Matrimonials

Careers

Lifestyle

Astrology

E-Cards

Columnists

Graffiti

Crossword

Letters

Environment

Jewellery

Info-tech

Power

Steel

Global Tenders

Filmtvindia

|

| |
Monday, May 24, 1999
Reform and politics
The month's flavour is consensus on economic reform. The rapid succession of coalition governments has inspired demand. Businessmen first voiced it, presumably to insure themselves against gung-ho import liberalisation. For an entirely different reason, bureaucrats want a consensus. They favour a cap on fiscal deficit, including revenue deficit. This suggestion first came from the Reserve Bank. Intellectuals too want a consensus, inter alia, to protect the Ninth Plan which has been subjected to revisions and now faces the prospect of a re-revision. But political parties which have to get the consensus are silent. The chances are that the coming general election will throw up a coalition government. Judging by experience, pressures from parties in government are about as keen as pressures from those in the opposition. This could skew economic policy. Hence the need for a reform agenda across the political spectrum.The demand for consensus is well-intentioned. The trouble is that it is far from clear whethera commitment to reform, or its absence, will sway the fortunes of political parties. The high prices of foodgrains certainly do not commend reform; nor the slowing pace of public investment in agriculture;and the threat of downsizing government and the public sector only dims job prospects. The pace of import liberalisation means precious little to the rural poor. What does reform promise those whose votes are critical to get into power? The answer to this question holds the key to the consensus being sought. It is difficult to say that reforms will spawn roti, kapda, makan. To this day, rozgar yojanas are all the poor can look forward to; and yojanas have been hit under reform. Yet it is true that reforms are necessary to raise the annual GDP growth rate to 7 per cent plus; this order of growth will ensure rapid employment expansion. Sure enough, private-led accumulation and investment (including foreign investment) must be brought centre-stage along with privatisation, etc. But there must be a perceivedlinkage between this strategy and employment growth across the land. Finally, what is the framework of policy within which reform is to be pursued? Yes, user charges must be raised; so must the quality of supplies of goods and services. Subsidies must be cut. But real incomes of people at base level must rise; high foodgrain prices result in just the opposite. There must be a public expenditure-switching strategy in favour of nutrition, drinking water,health and primary education. Let us face it. The focus of reform is on urban and rural better-off, hardly stuff of political consensus in the Indian context. Reform needs a public policy. Consensus can wait. Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.

Top
|
|
|
Printer-friendly page |
|