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|October 5, 2001||
Burning our bridges
These days when all attention is focused on the aftermath of the terrorist attacks on America, it was a surprise to find a seminar in Delhi to discuss how the Indian media reported economic reforms. It appeared that some determined journalists and intellectuals had taken upon themselves the responsibility of highlighting the inadequate coverage. They felt that certain facts were deliberately kept out of the people's gaze.
Not a word on the seminar figured either in the press or on television networks. What probably seems to have worked against publicity was the dart of criticism that the participants threw at financial journalists. They blamed them for fooling the readers even after 'realising' that India has been led up the garden path.
Another reason given by the Press Council in a report is: "Some companies are given excessive news coverage in newspapers or magazines because they have issued advertisements to that print media. Sometimes adverse reports are published on the companies which do not give advertisements to newspapers or magazines..." Of course, financial journalists have been attacked for having received "gifts, loans, discounts, preferential shares etc" for giving "favourable and positive reports on companies".
Whatever the reason, neither economic reforms nor globalization has helped India. The public sector has been decried and disowned for good reason, because the return has been nowhere near what is expected from an investment of thousands of crores. Still there is no running away from the fact that the government will have to intervene to lessen the impact of the economic crisis faced by the country. In a way, the philosophy of the public sector has to be reintroduced.
It is an irony that after having introduced market economy for more than a decade, it is realised that part of the solution lies in more government expenditure. Why was the apparatus of public spending dismantled in the first instance?
It is true that the shackles of the bureaucracy needed to be broken. But economic reforms have only strengthened them and given officialdom some other reasons to put impediments in the way. Also, in the name of competition, tariffs have been reduced and foreign goods allowed to flood the markets, crowding out Indian products.
Something worse is now taking place. For the first time agricultural produce, the mainstay of people in the countryside, is getting a beating because cheaper farm products are coming from abroad. Farmers are finding it difficult to sell their products at remunerative prices. The government's minimum price support is not working properly. The Food Corporation of India has refused to pick up produce or has done so selectively. The left-out farmers have suffered huge losses.
The experience of wheat crop was bad. Farmers had no alternative except a distress sale. The FCI acted under political orders. Many farmers received far less than the government had promised as the minimum price. Officials openly said they had no money to buy the entire output.
Farmers may once again be at the mercy of shopkeepers and speculators in view of the bumper paddy crop. The government promise to pay the minimum price does not seem to be working.
Some experts say farmers must switch over to a new crop pattern. It is easier said than done. Farmers adopted certain crops and the way of cultivating them decades ago. How do they give them up suddenly? Who will persuade them to do so? What incentives are there to switch over to something different? Most of the farmers are already in debt.
We face this disastrous situation because foreigners have extracted the maximum advantage, but given little in return. It was argued that if India wanted foreign investment in capital goods, it must first allow consumer goods like cold drinks, hamburgers or chocolates. So far nothing has come except consumer goods. With war clouds hovering over the region, there is no likelihood of any foreign investor coming. India will have to fend for itself. The old, hated word "self-sufficiency" is already in use. It will come back with a vengeance. We have already burnt the bridges behind and we have no clear way ahead.
The mere lifting of sanctions by the US does not solve our problems, not even psychologically. We have already been getting loans from international economic institutions. We may come to have access to some advanced technology. But this will not help. We want huge foreign capital.
Ultimately, we will realise that there is no alternative to self-dependence. Finance Minister Yashwant Sinha says the country's economy is strong enough to take the impact of hostilities. But he is given to complacency. If one were to go by his statements, India would have been nearing the growth rate of 8 per cent, which, woefully, is around 5 per cent now. New Delhi does not seem to appreciate the gravity of the crisis.
When economic reforms were introduced, there was no discussion even in Parliament, let alone the country. The nation should at least be taken into confidence now. Which measures are contemplated to do away with the ills of economic reforms and globalization? Thankfully the press, once gaga over reforms, is beginning to reflect some disappointment.
Most journalists are still carrying economic reforms on their shoulders. Even then expressions like "distortions" in the economy and foreign investors "not playing their role" have begun to appear in print. To that extent, the ill effects of reforms on the economy are finding place in the media.
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