The Big Debate
- Hueiyen Lanpao Editorial :: September 27, 2012 -

Now it becoming is clear that despite strong political opposition and the dramatic exit of Mamata Bannerjee's Trinamool Congress Party, the Congress-led United Progressive Alliance (UPA) Government at the Centre is firmly set on embarking on an ambitious economic reforms to fast-track the road to reviving a flailing economy.

In a televised address to the nation last week, Prime Minister Dr Manmohan Singh went to extra mile in trying to explain the rationale behind taking difficult decisions like opening the country to foreign direct investment (FDI) in multi-brand retail sector, reducing subsidies on fuel and paving the way for the next round of changes in the pension and insurance sectors.

The economist turned politician, who has been credited with initiating the first wave of economic liberation in early 1990s in the country while he was the Finance Minister in the government of PV Narasimha Rao, emphatically stated that the country's fragile economic situation needed that push and asked for his hands to be strengthened in this tough hour.

Consequently, the Congress Working Committee (CWC), the highest decision making body of the party, which met yesterday (September 25) to discuss mainly how to complete its term and reach 2014 with least dissonance, has announced its unanimous decision of backing the government in ushering in what has been term as the second generation economic reforms in the country with party President Sonia Gandhi maintaining that economic reforms are essential.

No doubt, with the economic growth rate of the country falling significantly in the first half of this year to about 5.5 percent and the value of Indian rupee continuously fluctuating against the dollar, the UPA government has been under pressure to take tough economic reform measures even to the extent of biting the bullet and losing the support of the second largest ally in the coalition government.

As the debate over the need for the second generation economic reforms in the country and the stand of UPA government over it rages, it is interesting to note that despite their aggressive opposition, the opponents of economic reforms, particularly with regard to allowing foreign direct investments in retail are not anti-reform per se.

Even the fury of Mamata to divorce from UPA appears to have stemmed from the fact that her party had not been taken into confidence at the time of arriving at such a crucial decision by the Congress party.

The Man of the Hour and Samajwadi Party supremo Mulayam Singh Yadav, who has stepped in to save the day for the Congress party by declaring his outside support to the government, has also made it clear that his opposition to big foreign chains like Walmart to set up shop in India would remain as it would hit the farmers and small retailers.

So, we need to be cautious and look back to understand the nature of the changes that have been brought about by economic reforms in the country so far.

Major changes that have been witnessed in automobile and telecom sectors could never been termed as development when the gap between the poor and the rich is only widening with the poor become poorer and the rich becoming richer by the day.