ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Repudiating Malaviya s Legacy-Oil Multinationals Return

In the latest contracts for oil exploration signed with the oil multinationals the government has backed down on all counts: it has agreed to oil-sharing on a minority share basis, given up its insistence that ONGC be involved in the exploration work and, above all, been compelled to allow the oil multinationals' entry into the highly prospective Krishna-Godavari basin earlier reserved for exploration by the ONGC.

Business Pressing Hard for Concessions from a Weak Government

Business Pressing Hard for Concessions from a Weak Government BM Industry and trade seem to have decided that the time is opportune for pressing hard for additional concessions from a politically weakened government.

Drought Relief Belated, Half-Hearted

Half-Hearted BM The government's reluctance to release foodgrains from the buffer stock to drought-hit areas can only help vested interests especially in rural areas, the surplus farmers and traders. While the opposition parties have made strident demands for higher procurement prices, they have been remarkably subdued about food-for-work programmes. And the state governments are far too busy seeking more central assistance to carry out drought relief programmes. It is the rural poor who will bear the crippling consequences of the widespread drought. Is the centre unwilling or unable to comprehend the scale of downturn of the economy presaged by the failure of the monsoons?

Privatisation, Indian Style

Privatisation, Indian Style BM An influential group of US experts had some time back advised the government of India to take "appropriate" privatisation measures and suggested that the energy sector would be "a good place to start". The Indian government has obviously taken this advice very seriously as can be seen from the decision to invite the Tata and Birla houses to join in equal partnership with the public sector Indian Oil in setting up the Karnal and Mangalore refineries from which the returns will be large and assured.

FICCI Sees the Light

FICCI Sees the Light Even the FICCI now recognises that the critical factor holding back industrial growth is insufficient demand, though the remedies that business and industry are lobbying for and which the government has been progressively conceding

NEW DELHI

Liberalisation of Economic Policies World Banks New Push THE Indian delegation to the annual meeting of the so-called Aid India Consortium under the aegis of the World Bank at Paris would lack this year its customary aplomb and assurance. The delegation which is traditionally composed of senior officials in the union finance ministry will have to work under an intense two-pronged pressure. The political tensions which have surfaced in the past few months and were wholly unexpected for the finance ministry bureaucracy have induced the political masters to revert with remarkable alacrity to radical rhetoric. This the finance ministry bureaucracy had smugly thought belonged to a bad past which had been left behind by the young, dynamic and pragmatic political leadership at the helm of government affairs. The Indian side at the Paris parleys on western aid commitment would, therefore, they believed, have smooth-sailing and would not have to bother with the problems that radical posturing throws up for their aid diplomacy with the World Bank and the member-countries of the Aid India Consortium. That assumption no longer holds and the Indian delegation to the session of the consortium will be facing a difficult and ticklish task when it is closely questioned as seems most likely about the stability of economic and social policies, if not of the political regime itself, in India.

FROM THE IVORY TOWER

NEW DELHI Congress Working Committee Disowns Government's Economic Policy BM THE ruling parly attempted to turn an extraordinary somersault by its resolution on what it chose to condemn with characteristic cynicism as the "grand design of destabilisation" of External forces hostile to India" which, it proclaimed with equally cynical self-righteousness, were "inextricably linked with internal forces of political and economic subversion". It rested its case on "the events of the last six weeks'' (the resolution was adopted on April 18). This presumably means that the beating the ruling party, with the prime minister as its star campaigner, received in the West Bengal and Kerala assembly elections is sought to be projected as part of the grand design of destabilisation. It is also an admission that the hounding out finally of V P Singh from the government, after his transfer from finance to defence, and the exposure of a series of scandals, especially in costly defence purchases, have shaken the government and, despite its massive majority in parliament, the spectre of destabilisation has begun to haunt the political caucus in power. But if the Congress leadership thought that its latest shrill cry of destabilisation would carry conviction with the public and would smother all further questioning of its policies and conduct, it has failed to achieve such a diversionary purpose. On the contrary, it has opened itself more to public ridicule and strengthened doubts about its credibility and integrity. The edict that any questioning of the rise in defence expenditure in this year's budget presented by the prime minister himself would be anti-national has not prevented questions being raised on shady defence deals with arms merchants abroad. In contrast to the shrill denials and diversionary tactics of the government leaders at the centre, the dignified manner in which the non-Congress chief ministers conducted their business at their recent meeting in New Delhi and dealt with pressing political issues of public interest has been very refreshing. The chief ministers suggested that the questionable defence deals must be examined in parliament, if necessary in a special session not open to press and public.

NEW DELHI-Redefining Development

NEW DELHI 'Redefining' Development BM AFTER presenting the budget for 1987-88, the prime minister made the pompous claim that his budget was aimed at growth and poverty alleviation. Nobody has been taken in by this claim and it is regarded as lack- ing in credibility as well as conviction, The suggestion by the union minister of state for finance, B K Gadhvi, during his intervention in the debate on the budget in the Lok Sabha, for what he called "redefining" of all government expenditure

NEW DELHI-Political Economy of 1987-88 Budget

Political Economy of 1987-88 Budget BM TWO lengthy quotations from Jawaharlal's speeches in the speech of Rajiv Gandhi presenting the budget for 1987-88 have been enough for the cheer leaders who like to flaunt their left-progressive pretentions to applaud the return of the young prime minister to what they call the 'Nehru path' in economic policy from which he may have strayed during the last two years because of inexperience and some bad influences. They seem to have been greatly encouraged in their hopes by the negative reaction of the stock markets. It is indeed remarkable that so high were the expectations of tax reliefs and fiscal incentives of business interests from the prime minister that even a status quo in income and corporate taxation, with a scries of other fiscal crumbs scattered all over the budget, led to a crash of share values on the stock markets. The confidence of business interests in the established power structure over which Rajiv Gandhi presides is obviously very heavily motivated and can easily sag when their demands are not met with alacrity just as self styled leftists clutch at straws to claim a lurch in their favour. What stands out, however, is the inability or unwillingness of the prime minister to make a turn away from the liberal fiscal and budgetary philosophy that has prevailed during the last two years and go for what may be called a conventionally hard budget in the face of an extremely stretched budgetary position. He has actually chosen to meet the demands on resources for security at the cost of development. Missing clearly is what may be said to be the Nehru touch in the face of the inexorable demands of defence and development such as was applied in the early sixties when it was considered necessary to step up defence expenditure and what may be called a severely harsh budget was drawn up under the direction of the then prime minister. The easy option, after some fudging of figures of revenue and expenditure, of leaving a large deficit uncovered and refraining from a major additional resource raising effort has been adopted on the present occasion. The seemingly firm and unqualified assurance of the prime minister that the deficit in the coming year's budget would not be allowed to swell, as has happened in the current year which is expected to end with a deficit of as much as Rs 8,285 crore as against the budget estimate of Rs 3,650 crore, is, of course, too facile to carry conviction or credibility. A much larger deficit than estimated for the coming year with all its adverse implications is actually indicated by the budgetary sums. The fact indeed is that the budget-makers, by design or default, appear to have over-estimated revenue receipts and under-estimated expenditure of the government.

NEW DELHI-Exit the Gracious Ruler

NEW DELHI Exit the Gracious Ruler BM THE last fortnight in New Delhi has been full of excitement. The prime minister went completely berserk and his stock in political circles, including his own party, the press and public has touched an all-time low. Laboured attempts are, of course, already under way to revarnish his popular image of a gracious and composed leader. But it will take some doing.

NEW DELHI- Exit Experts, Enter Courtiers

Exit Experts, Enter Courtiers THE dissolution of the highly advertised and applauded overall policy planning committee headed by G Parthasarathy within less than a year of its constitution has attracted considerable attention. It could not have been prompted merely by the resignation of Parthasarathy on 'health grounds', There must be, after all, other prominent personalities waiting in the wings to occupy the prestigious office vacated by Parthasarathy. The general impression, however, is that the prime minister is no longer impressed by or even interested in expert advice and prefers to go by his own unfettered hunches and inclinations. It appears that other expert committees and commissions such as the economic advisory and the science advisory committees which were set up one after another to give advice, personal and private, to the prime minister outside the official and institutional framework of the government too may soon be dissolved. These bodies in any case have not been called upon to do a great deal of work and their influence on policy-making has not been impressive, The prime minister, on his part, has not been paying much attention to their labours and, whatever advice they may have rendered, they could not have offered the simplistic answers to policy dilemmas which is what the prime minister likes. The advisers too have tended to give advice, especially in the area of economic policy and management, which may be regarded as being in conflict with the policy preferences of the prime minister. The reservations expressed by the economic advisory committee on the question of import liberalisation and management of balance of payments are known to have caused not only confusion but also embarrassment to the government. The science advisory body too may not have fully endorsed the government's policy of repetitive and continuous import of high technology and equity participation of foreign suppliers in business ventures based on high tech imports.

NEW DELHI-Shedding Hang-Ups about Self-Reliance New Technology Import Policy

NEW DELHI Shedding Hang-Ups about Self-Reliance New Technology Import Policy BM WHILE the exact conditions and safeguards which have been agreed to for the installation of the supercomputer by the US firms in India remain a closely guarded secret, the union government has taken a -series of decisions in recent weeks to encourage what is called transfer of high technology to India. These decisions may well establish the necessary conditions which will place foreign suppliers of high technology, the multinationals, in a position in which the application of any technology supplied by them to India will be directly managed and regulated by them. This has ominous implications for indigenous R and D for any meaningful absorption, adaptation or development of imported technology, let alone gaining technological self-reliance, now or in the future.

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