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

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'On the Move Again', It Seems

'On the Move Again', It Seems

With the death of principled politics, big business has the last laugh. 

The international credit rating agencies were threatening to downgrade the country’s sovereign credit rating. A piece in The Washington Post had described Prime Minister Manmohan Singh as “a dithering, ineffectual bureaucrat presiding over a deeply corrupt government”. Coalgate had created the impression that the manner in which the coal blocks were allotted were designed to benefit the private sector companies which must have greased the palms of those who made the awards, and the prime minister, instead of clarifying as to how the allotments had been made when the coal ministry was under his charge, chose to find fault with the Comptroller and Auditor General’s report. Besides, day in and day out, the commercial media had been flogging the “policy paralysis” story. How should the government have extricated itself from this trap of its own making? What better remedy than economic “shock therapy”, which came on 13 September with the double-digit percentage rise in diesel prices and the drastic cut in the subsidy on liquefied petroleum gas. A second dose of the thunderbolt was administered the very next day – allowing multinational retail giants like Wal-Mart, Carrefour and Tesco to gain management control in the business of multi-brand retail and international airlines to acquire up to 49% of the equity capital of domestic air carriers, and raising the limit to which foreign investment can be made in domestic broadcasters from 49% to 74% of their paid-up equity capital. Moreover, not satisfied with the estimated saving of Rs 60,000 crore in the subsidy bill on petroleum products, the union government decided on a large sale of its equity holdings in some public sector undertakings.

Big business and the commercial media were euphoric; the prime minister had at last restored the country’s image amidst foreign investors. Indeed, “India is on the move again” and other such evocative expressions of elation found their way in repeated broadcasts on this “big bang Friday” (14 September) and in print the next day. Barack Obama would no doubt have been immensely pleased, for the business prospects of the likes of Wal-Mart for whom he had made a pitch in July were now bright once more. For the people, the Congress Party, which leads the United Progressive Alliance (UPA) government, could not have cared less – you do not need to be an economist to know that the steep rise in fuel prices were soon going to result in a further increase in food prices (the people already burdened on that score since 2008) and a hike in public transport fares. The ­Trinamool Congress (TMC), whose 2009 election manifesto supported the entry of the likes of Wal-Mart and Carrefour in multi-brand retail, sensed the alarm of the tens of millions of small shop owners and threatened to withdraw support by its 19 Members of Parliament (MPs). This time it actually did so. The segmented opposition, the Bharatiya Janata Party (BJP) and its National Democratic Alliance (NDA) partners on the one hand, and the Left Front and its opportunist allies – the Samajwadi Party (SP), the Biju Janata Dal, the Janata Dal (Secular) and the Telugu Desam – on the other, correctly sensed the public mood. They separately called a bandh on 20 September to protest against the government’s shock therapy.

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