VISION OR CONSPIRACY? - Everybody, except the communists, wants a prosperous India

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VISION OR CONSPIRACY? - Everybody, except the communists, wants a prosperous

India Wed, 17 Aug 2005 07:17:19 -0700>VISION OR CONSPIRACY? - Everybody,

except the communists, wants a prosperous>India>S.L. Rao>THE TELEGRAPH,>AUGUST

17, 2005>>Everyone would like to see a strong and prosperous India with

enough>opportunities and good living for all. There are different routes. But

the>experience in many countries is that improved productivity, efficiency

and>quality in producing goods and services, including health and education for

the>poor, open economies and competition, achieve rapid growth with equity.

From>their actions in the year they have run the United Progressive

Alliance>government from outside, the communists appear to be against this

route. They>would rather redistribute wealth. They do not accept that

individual incentives>lead to growth, and that the communist method will keep

the economy at low>levels of efficiency and productivity.>>Many suspect a much

more ominous plan behind communist obduracy. Their>well-thought out strategy

for India might replicate their successful strategies>in gaining West Bengal.

It begins with frightening away existing industry and>new investment through

militant labour actions. It includes stimulating law and>order problems with

acts of random violence. On seizing power, they capture>mass votes, as in West

Bengal, by land reforms. They place their cadre in>strategic positions in

government at all levels so that they have an unbeatable>electoral machine.

Meanwhile, industry and investment flee and the economy>deteriorates. After

achieving full control over the state machinery, they stop>labour militancy and

violence to attract investment, as in West Bengal.>>The communists are for

restraint on consumption, more simple lifestyles and>heavy taxes on the rich.

They have opposed disinvestment in public sector>shares. They fomented the

violent labour agitation in Gurgaon. They would>rather bankrupt the oil

companies than permit end prices to rise despite input>cost rises, thus gaining

brownie points with voters. They are sabotaging>power-sector reforms by

demanding amendments in critical portions of the>Electricity Act 2003. They

oppose improved efficiencies in the public>distribution system. Their thrust

for a colossal national giveaway through a>guarantee of employment to all

families along with many other actions show that>they are working to a plan.

They are opposed to any rapproachment with the>United States of America. The

plan is to frighten investment, bring industrial>decline and use the chaos for

gaining power nationally. A “Third Front” will>give them this power.>>Some

elements in the communist agenda, reflected in the national common

minimum>programme, were doubtless appropriate. The communists pushed for the

social>issues in the NCMP. But a “human face” to reforms is not a

communist>innovation. It has been in the semantics of reforms from the

Narasimha Rao>days. His “middle path” was a reflection of his concern to go

forward at a pace>that would not hurt the poor and vulnerable. But without

reforming government,>no amount of money will deliver services to the poor. The

communists are silent>on this.>>Indeed, India under different governments

developed a consistent reforms model>that is unique. The rupee is not yet fully

convertible despite the many who>have wanted it done since the early Nineties.

The economy is still closed to>foreign investment in selected sectors. We have

resisted any attempt to cut our>protection for agriculture. We have not changed

labour laws and continue to>have the same laws even in the special economic

zones, unlike China. Our public>sector remains largely as it was, both in

ownership and in government control.>Little is privatized. Even the sale of

shares in stateowned enterprises was>spasmodic and is now halted. Subsidies on

many products like fertilizers,>power, kerosene, LPG and so on, continue. Price

control on pharmaceutical drugs>remains, although now somewhat more flexible

than before. Basic commodities>like coal remain under government ownership.

Import duties remain higher than>in most other countries. Electricity under

mostly government ownerships, with>communist help, bodes to be in permanent

darkness. Higher and professional>education remains largely with the government

and is heavily subsidized.>>Despite all the rhetoric in favour of the poor

(starting with Indira Gandhi’s>Garibi Hatao), we have yet to successfully

deliver health, education,>nutrition, gender equality and upward mobility to

the majority of the lowest>among the scheduled castes and tribes and religious

minorities. This failure is>not the result of any cold-blooded rationality of

our reformers to push ahead>with reforms even at the cost of the poor. It is

because of the inability of>our administrative system to spend the allocated

amounts and deliver such>social services to the needy.>>The poor prefer quacks

to the government health centres, except when the ailment>is so serious that it

needs hospitalization. Subsidized foodgrains and oils get>diverted from the poor

for whom they are meant, as do kerosene and other goods.>Government schools are

in a shabby state. Our cities and towns are vast>festering sores of filth and

congestion. I have not heard any communist even>whisper that we badly need

administrative reforms in India to improve the>quality of life and opportunity

for the poor as for others. Communists are>against improving efficiency and

productivity even for benefiting the poor.>>Communists do not believe that

better management can actually help the poor.>They would rather procure, store,

transport and deliver as rations, millions of>tonnes of foodgrains. They are

unwilling even to countenance any alternative>that will avoid this complex

logistical and inherently corrupt effort.>>The communist approach to the public

sector (although not in Bengal where they>are now in the reconstruction phase

after having destroyed its economy) is>that, however much of a drain, the

public sector units must survive. They would>like petrol, diesel and kerosene

prices to be pegged even when the input crude>prices are exploding. They do not

care if electricity is sold below cost and>huge losses incurred by state

government enterprises. They want all subsidies>and infructuous government

expenditures to continue. They have only one>approach to the government’s

financial deficits: tax the rich. They refuse to>accept that high taxes are

counter-productive and do not lead to higher>revenues, while they push back

growth.>>In the world of more openness to ideas, markets, goods and services

and>increasingly, to people, the dominant motivation is materialistic

and>consumption-oriented. This may be good or bad. But the shift is inevitable.

No>country has tried to stop it except Myanmar, North Korea and Cuba.>>In our

domestic policies, all parties except the communists appear to favour>strong

action to stop the terrorist movements labelling themselves Maoist or>Naxalite.

They are against weeding out illegal Bangladeshi immigrants and>sending them

back to Bangladesh. This protects their Muslim vote-banks (which>include

Bangladeshis). This also explains their pro-Arab and

anti-Israel>stance.>>Except the communists, all parties seem to have recognized

the realities of a>unipolar world. The US dominates the world in every respect.

Both the Bharatiya>Janata Party and the Congress have simultaneously developed

stronger relations>with the US as with Asia and our neighbours. The communists

would rather>improve relations only with China and the Muslim world. For them

China is no>threat and our nuclear explosions could not have improved our

strength in>relation to China. The enemy for them are the US, and the Western

and>capitalist countries.>>There appears to be a sinister method in the Indian

communist conspiracy of not>promoting the national interest, and destroying it

so that the communists can>pick up the pieces.>The author is former

director-general, National Council for Applied

Economic>Research.>>>>------------------------------->This

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