The Hindu Business Line : Growth pangs

The Government should have learnt from recent history that any structural shift in the distribution of resources (or costs) for development creates insecurities that need to be addressed.

Last weekend, three POSCO officials were kidnapped but later released in Orissa by an organisation that opposes the Korean giant’s proposed $12-billion steel plant near Paradip port. The act, purportedly carried out on behalf of villagers reportedly distressed by the acquisition of their lands for the project, was the fifth in a series of violent incidents; in May, in unrelated acts, officials of companies planning SEZs or other new projects were roughed up by orga nised groups purporting to represent aggrieved farmers in diverse parts of the country. In another sector of the economy, long-dormant organisations have led small traders opposing the entry of large foreign and domestic firms in retail trade forcing, for instance, Reliance to shut its stores in Uttar Pradesh.

Both the inchoate agitation over land acquisition and the welling opposition to organised retail by traders have elicited awkward responses from policymakers. In the case of farmers whose opposition is as yet diffused and, therefore, amenable to peaceful resolution, New Delhi has either left it to the states to handle the crises as and when they erupt or conjured inadequate and sometimes hare-brained answers to the complexities of compensation for displaced persons. As for the petty trade’s opposition, the reaction from state capitals has been either tacit approval as in Uttar Pradesh or silence as in the rest of the country and New Delhi. A government that has given the economy a road map of growth four years down the line appears ill-prepared for the problems that confront its journey. Headed, as it is by one of the chief architects of the early reforms, the Government should have learnt from recent history that any structural shift in the distribution of resources (or costs) for development creates insecurities that need to be addressed.

Fifteen years ago, the phased cuts in Customs duties drew sharp responses from sections of industry threatened by cheaper imports. Persisting with the reductions, policymakers engaged Indian industry in a dialogue that led to reforms in domestic duties to level the competitive field. That is a lesson New Delhi must recall as the economy enters another crucial phase of industrial expansion and adopts new modes of retail trade. New stakeholders — farmers and petty traders — are involved in this transition and they should be engaged by the state in a consensus building exercise. New Delhi could start by convincing them that a growing economy has place for every productive activity and none need be the loser.

Related Stories:
Anti-POSCO activists free labourers
Four POSCO officials taken hostage, released
Protest in Mumbai against corporate retailers
We will co-exist with the mandis, says Wal-Mart

More Stories on : Editorial | Steel | New Projects

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Climate, Nobel and Al Gore

Growth pangs

Multilateralism is here to stay

The right to recall MPs

Temporary shunting is no cure

Extracting gains from mining

Can Mt Everest get taller?

Help public transport