B S Raghavan

A show of guts sans ifs and buts!

B.S.RAGHAVAN | Updated on September 16, 2012

What a barrage of daring decisions to descend on a country when it was least expecting it, all within a matter of two days – jacking up diesel price, letting FDI in multi-brand retail sector, opening civil aviation to FDI, raising the ceiling of foreign investment in direct-to-home and multi-system broadcasting services to a whopping 74 per cent, divestment in four major public sector enterprises to the extent of Rs 15,000 crores, and adoption of an ambitious Twelfth Plan to push the growth rate back to a stunning high of 8.2 per cent.

I am sure there was not one in India or abroad who did not pinch himself to make sure that it was real, all the time wondering what has come over the Government which seemed to be in a stupor for so long. More particularly, none would have been able to figure out how the Prime Minister, Manmohan Singh, at the receiving end of brickbats from all quarters for being a say-nothing, do-nothing tragic figure of an under-achiever, morphed into an implacable warrior determined to go down fighting.

Not only India Inc but also the official spokespersons, business and industry circles, and the global media are now singing his hallelujahs. In their view, the economic reforms juggernaut has certainly got a mighty push and shove, and is seen to be moving again. The universal opinion is that Singh had a big hand in pulling it off.


I don’t know whether the Government intended it to be so or not, but taking the nation unawares with an economic blitzkrieg of this kind is the cleverest political move that I have seen any Government make in a long, long time. It has, at one benumbing stroke, deftly deflected the attention of the political opponents and the public from the cacophonous caterwauling over the coal block allocations.

By presenting a cluster of moving targets, as it were, to its detractors, the Government has made it hard for them to take proper aim at any one of them. The denigrators suddenly find themselves with a number of quarries that they have to chase and, being ill-prepared to chase all of them at the same time, they confront the prospect of at least some of them escaping their clutches.

That aside, the cardinal point is that unless we assume the Government to be unpatriotic and wantonly working against national interest, there is no reason to doubt the Prime Minister’s assurance that the new slew of policies will impart a forward thrust to the economy and result in strong, inclusive growth. The evaluation of the benefits and drawbacks of these measures must have gone on for quite some months in the various Ministries concerned and exhaustive internal as well as inter-Ministerial discussions must have taken place before arriving at a balanced conclusion.

From my perspective, opening the doors for investors, both domestic and foreign, as envisaged by the recent initiatives, will help realise the near-inexhaustible potential of a market of gigantic proportions and contribute not only to early improvement in the living standards of the vast masses of people, but also generate ample resources for being ploughed back into the economy.


Also, integration of a country’s economy with that of the rest of the world enables it to plug into both front-end and back-end technologies, bridge the rural-urban divide, eliminate unwanted middle men, make commodity prices equitable and affordable, and build the necessary infrastructure. An additional advantage of immeasurable value is the permeation of best practices in quality control, productivity, procurement, marketing, customer relations and service delivery.

It is true, though, that, as in every sphere of human affairs, well-meant economic reforms too could be sabotaged by manipulators and fly-by-night operators. The surge of confidence arising from them may by itself be an antidote to any harmful tendencies. Even so, it is imperative for the Government to devise effective regulatory mechanisms to enforce the conditions and safeguards which are an integral part of the reforms process. Otherwise, there could be total anarchy in the name of reforms.

All in all, my earnest appeal to political parties is: Please set aside your fears and suspicions, and give the measures a chance. You will not regret it.

Published on September 16, 2012

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