ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Much Ado about Nothing

THE finance minister's intolerance of any criticism of the economic reform programme and any suggestion that its fruits may not have been as wholesome as claimed by him and his admirers is well known. So it is not surprising that he should have taken umbrage at the Planning Commission's mid-term appraisal of the Eighth Plan and prevailed upon the prime minister to put off the meeting of the full Planning Commission called to consider it on the 19th of this month. (Apparently this would have been the first such meeting of the Commission in nearly two years, which is some indication of how little use the government has had for the Planning Commission and the Commission's own failure to carve out a worthwhile role for itself in the post-reform context.) Unfortunately for the finance minister, the Planning Commission's review of the Eighth Plan has come up at a time when he and the economic reform programme are very definitely on the defensive. It has come to be widely accepted, most importantly in the ranks of the Congress Party itself, that a large part of the blame for the severe reverses the party has suffered in the assembly elections in a number of states belongs to the economic reform policies and the hardships and privations they have caused to the large majority of the people. In its own terms too the reform programme has come to be discredited for a variety of reasons. Judged by whatever criterion the fiscal deficit as a proportion of GDP, the size of the centre's revenue deficit, the rise in the government's debt and the interest burden thereon the finance minister's efforts to restore a measure of order to the government's finances, which task was acknowledged to be the cornerstone of structural adjustment and economic reform, have, after much huffing and puffing, conclusively failed. The situation will get even more out of control in the next few months as the government sets about doling out large sums of money for so-called welfare schemes in a desperate attempt to salvage the ruling party's prospects in the coming elections to the Lok Sabha. That the reform programme has run out of steam is also indicated by the fact that for quite a while now no new policy initiatives, including in areas where the government has been repeatedly promising them, have been forthcoming. Finally, actual developments in crucial sectors of the economy, such as power, show that, contrary to the shibboleths of free competition, transparency and elimination of rent-seeking, it is business as usual more or less, with cosy deals involving gigantic projects being struck in total secrecy, giving rise to well-grounded suspicion of bribery and corruption.

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