The story of the growth of Indian economy is something the whole world has been talking about for a long time now. It is said that this story started in 1991 with the implementation of the first set of economic reforms characterized by the economic liberalization policies which moved India to a market based economy. Today, India is considered to be one of the fastest growing economy which is predicted to be the world’s number one economy by 2043. Riding on the new found freedom of pseudo stability in coalition politics at the Centre, the government is busy implementing the so called second set of economic reforms which according to their economic pundits, will accelerate the economic progress of our country.
But the question is whether this is the kind of economic growth that we need. I am not an expert to understand the complex economic theories and policies. But I can understand one thing and that is the impact of these policies on a common man.
When I read that the public debt of my country is 68%, I understand that it will enslave India, leaving the common man at the mercy of international funding agencies. Our government is competing with itself to open the doors for the foreign investors in all possible sectors. The cap for FDI in insurance is now being increased to 49% and the pension funds are being opened up for FDI. By opening up the pension fund and associating it with the speculative market, the government is committing the criminal offence of risking the right of millions of employees to have a peaceful retirement life. One should not forget that it is the nationalized banking and the regulations in the financial sector which shielded the Indian economy from the recession which hit the world. The retail sector which is the pillar of Indian economy is now opened up for 51% FDI in multi brand retail and 100% for single brand.
Through these liberal reforms and deregulations the government expects to attract more foreign investments in to the country which they feel would strengthen our economy and accelerate its economic growth. If the surge in Sensex and Nifty are the only parameters to measure this growth, well, the government could be right in what they claim. But the reality is we are growing our economy not for the majority of Indians who belong to the category of “Common man” but for the select few whose position in the list of richest in the world move few steps up and down with every change in the Stock Exchange index. It is important to realize that it would be a shame to be the number one economy with the majority of the population living in poverty.
The decision to decontrol the price of petroleum products have led to the increase in the price of petrol and diesel at will by the oil companies. The fuel price hike and withdrawal of subsidies may have forced the common man to reduce the consumption of petroleum products but have definitely fuelled the rate of inflation. The price of food and other basic necessities are raising at an alarming rate which has made the life of a common Indian miserable. These reforms which are aimed to attract investors, together with the government’s move to disinvest the public sector and dismantle the public distribution, are now threatening to push our country to insecurity, hunger, and deprivation. The current economic growth of India can be compared to a bubble which is expanding the gap between the rich and the poor. From outside it may seem that the economy is growing but the fact is that that as long as the benefit of the growth resulting from the economic reforms do not reach all the levels of society, this bubble is at the risk of bursting someday, which would leave our economy in shambles.
The prevalent corruption in the system is compounding the problems and making the sustenance of common man much more difficult. It is alarming to see that the society has accepted the corruption as a part of Indian culture. I have heard people mentioning that the corruption involved in the 2G scam, which lead to the distribution of licenses at low prices, have ensured that the mobile phone call charges are cheaper in the country. It is true that the lower prices at which the licenses were distributed have helped in keeping the call rates cheaper. But what they forget is that this could have been achieved in a transparent manner if necessary measures were put in place to control the license pricing which could have in turn ensured that the money which was used to bribe the corrupt would also have gone in to the government kitty.
I am not against the economic reforms. Economic reforms are necessary to ensure that our country stays ahead and transform in to a developed nation. But it should be ensured that the benefit of these economic reforms reach all levels of the society. The government should enact laws to ensure that the Indian market, which is the world’s third largest in terms of Purchasing Power Parity, is not exploited by the foreign investors. Better opportunities should be provided to help our industries compete with the world. Incentives should be provided to promote agriculture sector, which is the biggest contributor for our GDP and provides employment to the majority of Indian population. Reforms should be directed for the benefit of common people and not for the selected few. There is no point in growing the economy by making the rich richer and the poor poorer. It is the responsibility of the government to ensure that the economic reforms lead to the eradication of poverty and unemployment. The final outcome of the economic reforms should be enhanced social security, better healthcare, development of national infrastructure and peace and prosperity in the country.