India's Most Influential Business and Economy Magazine - A Planman Media Initiative 
 Search  
  Other Sections
  
  • Home
  
  •  Cover Story
  •  B&E This Fortnight
  •  B&E Indicators
  • B School
  • International Column
  • Project Syndicate
  • Scrutiny
  • Sector
  • Snapshot
  • Special Story
  • Stratagem
  • Testimonial
 


Share |
Cover Story
 

They got it all wrong
Nilotpal Basu, Senior Leader, CPI(M), reasons why liberalisation policies are fundamentally wrong
Issue Date - 16/02/2012
 
As far as we are concerned, liberalisation or the reform process in a broad sense of the term has started from the 1991 budget of then finance minister Manmohan Singh. Apart from a few macro fundamentals, it was quite clear from the very outset that these reform policies would lead to an accentuation of inequality in the country. No growth process that accentuates inequality, poverty or unemployment can be sustained for a protracted period of time and that is exactly what is happening. The impact of these reform processes has been disastrous.

The policies are fundamentally wrong and their implementation has caused even more problems, especially for a country like India, where such a huge population lies below the poverty line. The government has to intervene, it has to offer support and welfare to the people who are less fortunate where the situation is really worrying. The most pronounced expression of this situation is in the field of agriculture. The kind of agrarian crisis that the entire rural heartland of the country is facing is severe and the crisis has already led to over 2 lakh farmer suicides. These have been caused by the reduction in public investment for agriculture, infrastructure, irrigation and so on. Farmers get nowhere near the actual amount promised in terms of the MSP for different crops. If the government is purportedly lowering the subsidies in the name of allowing market forces to operate, it is going in a direction that threatens our food security and the overall production of food grains. As a result of the crisis, farmers are not sowing crops in many areas. The financialisation of food grain business has led to astronomical profits for financial intermediates and can be seen in terms of the growth of turnover of food grain and other commercial crop businesses in the commodity exchanges of the country. This, combined with the reduction in food subsidy and the almost defunct public distribution system, has led to a strange price rise in essential commodities, leading to an adverse impact on the real income of the working population.

As a result of the reform process in the industrial sector, we have seen a complete restructuring of the manner of employment in this country where 92% of the people fall in the unorganised sector. Jobs in the organised sector are in the process of constant decline and the government has not provided any social security safeguards for people working in the unorganised sector. So, the burden of this increased price rise in the sphere of essential commodities, particularly food prices, has led to further diminishing of the purchasing power of the people. This is why we find that the domestic market is also shrinking.

In the case of tax waivers – where the government and reform advocates crib over subsidies – we have seen lakhs of crores of rupees every year being doled out. For the corporates it’s an incentive, but when it comes to the people, it becomes a question of subsidy. These are completely skewed ways of looking at how to spend our money through the public exchequer. There is also a process on where the natural resources of the country being handed over to corporates. This involves a rewriting of the policies which is ensured through the emergence of a very powerful nexus between the corporates, the ministers and bureaucrats, and this is also the source of major financial & economic scandals. We see a complete disconnect & duplicity of government’s policy-making when it comes to favouring the corporates and disfavouring the aam aadmi. On the whole, the liberalisation policies have not helped us. We have seen it even affecting the economic fundamentals of the country.

 

Parimal Peeyush           

Share |
 
 


      
Comments   
   
      
Leave your first comment

   


     Leave Comments to this story    
     
Name:  
Comments:  
Email id:  
City:  
 
 
Busines & Economy is also associated with :
©Copyright 2008, Planman Media Pvt. Ltd. An Arindam Chaudhuri Initiative. With Intellectual Support from IIPM & Malay Chaudhuri.