There is a lot of sound and fury that is going on the issue of the so called economic reforms initiated by the government last week. The main reason for so much heat and dust being raised on this matter is perhaps the timing of the announcements. They seem to be not only late but also felt unnecessary at this stage by many who would have supported the proposals a decade back. If we examine the proposals in the context of the the global economic scenario with a neutral and unbiased perspective we will find that indeed there is a serious problem that faces India . But surprisingly the problem is not only related or confined to the economy alone. Rather it is a telling indictment on the lack of leadership and the fractured polity which is acting as the dragging force pulling progress behind inspite of the not so bad performance of the economy, overall.
The pressures of a slow down are showing up now as the stagnating economy throws up major challenges to all the sectors. We have a pro capitalist Prime Minister who seems to be shackled by the chains of populism . This creates confusion in the atmosphere and every move to kick start growth is seen with a lot of valid suspicion. The government seems to be running away from confronting the issues either on the floors of the parliament or with the public by seeking a fresh mandate . Whatever be the merit of all the reformist measures proposed, it is doubtful that they can be implemented by the government . In a democracy, whether you like it or not , whether it suits you or not, only the parliament comprised of elected representatives of the people in the country has the power to change laws and pass regulations.
What is being forgotten in the debate for and against the policy for FDI is that the country actually needs a growth strategy which is inclusive and investment oriented at the same time . The sectors like agriculture and small scale industry should be an integral part of the policy. The only way by which the inclusive growth is possible is by creating more job opportunities and flow of funds to the above-named sectors. The burgeoning population of India is sometimes touted as a capital for the country. Paradoxically it is the same population which makes over reliance on heavy industries a dangerous proposition. The basic premises of a capitalist economy embracing the concepts of free economy is what the votaries of reform like to happen in India. But one should not overlook the fact that an economic system which which prioritizes profit making above the welfare of people is self destructing , more so in the context of a country and population like India. Those who point out to the effect of trickle down effect of the capitalist system may note that the effect and end use is lost all along the way due to massive corruption.
Talking only of efficiency and cost effectiveness in the face of poverty and glaring social disparity is not only erroneous, it is downright obscene. The thought process of the people who blindly follow either capitalist or communist model of economy without analyzing the cause effect relationship and the social dimensions of the country has to undergo a drastic change. This actually needs a large dose of empathy towards the ground realities faced by the people. Also the fact that we managed to steer clear of the financial crises hitting the world in 2008 because India not being fully integrated to the global economy should not be overlooked while making an objective evaluation of the proposal to open up the banking sector, insurance sector and pension sector to increased FDI . It represent a clear risk. All out privatization is never the answer to economic slump. Mobilisation of the entire population to growth by a sustainable model and increasing the skill level of the polpulation is the only way to fight back the deceleration. That should be done without corruption eating away into the efforts. Otherwise you will waste all your efforts capitalistic or socialistic like filling a big bucket with its bottom eaten away by corrosion.
And off course, the will and ability to govern is the last but not the least which is needed.