Friday, October 5, 2012

The FDI circus continues


The madwoman is on a rampage again. Ever since last night’s announcement of increasing of FDI to 49% in insurance, and a possible corresponding raise in the FDI cap in pension, she has gone on a complete rampage, egged on and supported by such massive well wishers of the “common man” as BJP.  

It is pertinent to remember at this point that the BJP, in its avatar as the NDA government, was the most avid and vocal advocate of financial reforms and FDI, and it was partly over reforms in pensions that they lost power in the first place. So what is this about face really about? Is it a populist attempt at garnering some share of the amm-janta-who-have-no-clue vote bank? Or is it envy, at the UPA managing to push through some unpopular, though much needed, reforms when they were unable to do so? Or is it part of some much deeper political game where toppled governments and early elections are supposed to give them back the lost throne?

Whatever the motivation behind the strident anti reform chorus, it is not helping to improve the overall situation. What with an abysmal fiscal deficit, rampaging inflation, and a staggering debt burden in the midst of a global financial meltdown, we can’t exactly ignore the fact that we need serious infusions of cash and hundreds of thousands of new jobs to get us to some kind of sane level where the economy actually functions and maybe even grows. So, where is this cash, these jobs, going to come from? It sure as hell won’t suddenly materialize out of thin air, neither are the billions already spent on fruitless social programs by the government suddenly going to bear fruit for no reason, especially since the billions have already gone well into various pockets of the various babus from the top of the rung all the way down to rock bottom. In short, things being as they are, the only way to breathe some life into the economy and to infuse some much needed lifeblood, is to throw investment options open to foreign players. Provided, of course, that the BJP, and other political parties, ever let it happen.

To top it all, we have Madame Bannerjee, screaming herself hoarse and threatening dire consequences like no confidence motions. She’s always been notorious for reacting first and thinking later, for basing political decision on emotion rather than rational thought, and – more recently – for being unashamedly populist. Given the fact that she had to break the leftist stranglehold of 34 years in the state of West Bengal to come to power, one understands the motivation behind her obviously successful pandering to mass sentiments. However, all she is doing now, is being is obstructive, obtuse, and frankly destructive of the very state she was given – with a lot of trust and hope – to try and improve, to drag kicking and screaming into the 21st century.

For some reason, she has decided to be more left than the left she defeated. This seems strange to normal, not knowing anything, people like me. After all, wasn’t she brought in to REPLACE the left because their system was NOT working? Presumably then, people want you to be everything they were not? So, in my limited logic, it seems that what people want for Bengal is more industries, more jobs, more open market, more opportunities for earning, given that those are the exact things that the left government systematically eradicated over the 34 years of their reign. However, she seems to have gone the opposite direction.

Instead of encouraging industries and laying down the red carpet to Indian and foreign investors, throwing open retail markets, and basically doing everything she possibly can to bring in the moolah and the jobs, what she’s actually doing is the exact opposite. Having begun her march to power on the back of the Singur/Nandigram controversy, she seems to have assumed that “revolutionary” posturing and pig headedness are more important than governance, especially in the run up to the municipal polls. So, neglecting the glaring problems at home, and the questions being raised about mismanagement and unnecessary delays in funding and completing projects of essential infrastructure and so on, she chooses to pay more attention to, and invest more time in, proving her revolutionary mettle on the national scene.

As for her own state, she is driving away whatever investments had already been inked, like Haldia, and talking of closing down even existing domestic retails chains like Spencer’s and Reliance and More, thus depriving a whole section of semi educated but presentable young men and women of decently paying jobs. She is rabidly anti FDI, supposedly to protect the common man when both farmers and the man on the street stand only to gain from the changes big chain retail can bring in, from contract farming, better prices to the farmer, better prices to the consumer, better quality, huge number of jobs from front office to back end operations, to better infrastructure to cater to the needs of these investors. So who is she trying to protect? Either the middlemen and business interests who pumped in money for her rise to power are being given their pound of flesh, or she is reacting in her usual irrational, emotional, knee-jerk way without any real thought or concern for the overall welfare of the state. Given the approaching municipal polls, where she desperately wants to establish a majority, the choices make political sense, maybe, even if they are unproductive and harmful in the long run.

As for the UPA, its sudden passion for reforms is suspect in itself. Had they made these moves soon after they came to power, one could have given them uncomplicated applause. Given that they choose to do this so late in the day, with the 2014 elections on the far horizon, in the middle of general public outcry and disgust over some of the greatest scandals and scams of our independent history, the whole thing smacks of a roman circus. Looks like a case of give the public, and the market, a feel good lollipop of reforms, and they will forget about all the indecision, inactivity, and the scams. Also, given that their numbers in parliament ate precarious at best after Mamata withdrew her support, things become murkier still. The cabinet has passed the reforms, well and good, but these are early days. The bills have to be passed by Lok Sabha, marginal possibility, and the Rajya Sabha, which is almost impossible.

Seems to me like the Congress is playing one of its age-old games. The bills will fail in parliament, and the party will go to the polls telling Johnny public “look, we tried, we want to make changes for you, but these allies, and this strong opposition, they didn’t let us succeed! So the next time give us a clear majority so that we can push the reforms through without hassle!”  God help us if the public takes them at their word! For now, all one can hope for is that some of the parties will see sense and help make these reforms a reality. Because we really can’t do without them.

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