02-29-2008, 04:22 AM
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Down, but could be up </b>
The Pioneer Edit Desk
Let's get back to aggressive reforms
The Economic Survey for 2007-08 pegs India's GDP growth at 8.7 per cent, which is less than the double-digit growth that had been promised by the Prime Minister as well as last year's 9.6 per cent growth. Seen in the context of the recessionary trends in the global economy and the worldwide slowdown, 8.7 per cent growth is not to be scoffed at; optimists will insist, and not without reason, the 'India story' is not yet over. But if we look beyond the growth figure at the statistics that form the bulk of the Economic Survey, we would find there is cause for concern. With the UPA Government -- hostage to a capricious Left -- focussing on populist, though bogus, welfare schemes and thus squandering resources, infrastructure has suffered the most. Every key sector has posted sluggish growth: The deceleration is most obvious in cement production (which has grown by seven per cent compared to 10.5 per cent the previous year) while the growth in steel has nearly halved. Strange as it may sound, there has been a decline in the growth of civil aviation, railways and telecommunications, although these sectors are perceived to be booming. Industrial production is down to nine per cent while agriculture is floundering at three per cent. True, the services sector has shown a healthy growth trend, but that is clearly overshadowed by the poor showing by other sectors. What makes the situation particularly worrisome is the consumer price index, which continues to inch its way upward. The Economic Survey, and Finance Minister P Chidambaram's comments on Thursday, <b>clearly indicate that a dramatic turnaround is not on the cards; that double-digit growth is unlikely to happen in the immediate future; and, that while tight fiscal policies may help contain inflation, it will not really be curbed</b>.
But, as the Economic Survey points out, there is a path out of the gathering despair, a mantra to push growth and ease the pressure on both Government and the masses: Revive and accelerate the reforms process, which has been in a limbo ever since the Left got to say 'no' in the summer of 2004 as the price for keeping the Congress in power. As a result, barring minor -- and hence inconsequential -- policy initiatives, reforms have been shelved with not so inconsequential results. Instead of freeing the economy from the remnants of state control, we have witnessed an effort to return to the discredited policies of the past by extending control regimes that titillate the imagination of our Marxists but dampen the market. The Economic Survey says this trend must be reversed and robust reforms reintroduced if growth has to be encouraged and inflation curbed. It recommends the sale of non-Navratna public sector units, phasing out of controls on drugs, fertilisers and sugar, allowing foreign direct investment in the retail sector and opening up of banking and insurance sectors. All this will no doubt serve as a red rag for the Left, but there is more to Parliament than those who want to hold India back.<b> If the Congress truly believes in what the Economic Survey recommends, let it reach out to the BJP for support</b>. The main Opposition party may say no to FDI in retail, but on other issues it cannot but say yes as they are in continuation of the second generation reforms it initiated when in power at the helm of the NDA Government. The nation's interests can -- and must -- be looked after by the two national parties. The Left can be left to stew in its own foul juice
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The Pioneer Edit Desk
Let's get back to aggressive reforms
The Economic Survey for 2007-08 pegs India's GDP growth at 8.7 per cent, which is less than the double-digit growth that had been promised by the Prime Minister as well as last year's 9.6 per cent growth. Seen in the context of the recessionary trends in the global economy and the worldwide slowdown, 8.7 per cent growth is not to be scoffed at; optimists will insist, and not without reason, the 'India story' is not yet over. But if we look beyond the growth figure at the statistics that form the bulk of the Economic Survey, we would find there is cause for concern. With the UPA Government -- hostage to a capricious Left -- focussing on populist, though bogus, welfare schemes and thus squandering resources, infrastructure has suffered the most. Every key sector has posted sluggish growth: The deceleration is most obvious in cement production (which has grown by seven per cent compared to 10.5 per cent the previous year) while the growth in steel has nearly halved. Strange as it may sound, there has been a decline in the growth of civil aviation, railways and telecommunications, although these sectors are perceived to be booming. Industrial production is down to nine per cent while agriculture is floundering at three per cent. True, the services sector has shown a healthy growth trend, but that is clearly overshadowed by the poor showing by other sectors. What makes the situation particularly worrisome is the consumer price index, which continues to inch its way upward. The Economic Survey, and Finance Minister P Chidambaram's comments on Thursday, <b>clearly indicate that a dramatic turnaround is not on the cards; that double-digit growth is unlikely to happen in the immediate future; and, that while tight fiscal policies may help contain inflation, it will not really be curbed</b>.
But, as the Economic Survey points out, there is a path out of the gathering despair, a mantra to push growth and ease the pressure on both Government and the masses: Revive and accelerate the reforms process, which has been in a limbo ever since the Left got to say 'no' in the summer of 2004 as the price for keeping the Congress in power. As a result, barring minor -- and hence inconsequential -- policy initiatives, reforms have been shelved with not so inconsequential results. Instead of freeing the economy from the remnants of state control, we have witnessed an effort to return to the discredited policies of the past by extending control regimes that titillate the imagination of our Marxists but dampen the market. The Economic Survey says this trend must be reversed and robust reforms reintroduced if growth has to be encouraged and inflation curbed. It recommends the sale of non-Navratna public sector units, phasing out of controls on drugs, fertilisers and sugar, allowing foreign direct investment in the retail sector and opening up of banking and insurance sectors. All this will no doubt serve as a red rag for the Left, but there is more to Parliament than those who want to hold India back.<b> If the Congress truly believes in what the Economic Survey recommends, let it reach out to the BJP for support</b>. The main Opposition party may say no to FDI in retail, but on other issues it cannot but say yes as they are in continuation of the second generation reforms it initiated when in power at the helm of the NDA Government. The nation's interests can -- and must -- be looked after by the two national parties. The Left can be left to stew in its own foul juice
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