India’s parliament meets next week to propose, discuss and pass budget proposals. These proposals will be viewed with interest by the developed countries of the west for how far the Indian government is willing to go in for the promised liberalization. Prime Minister Rao and his finance minister Manmohan Singh have offered to open up India’s economy to multinational companies for investment. There has been great deal of interest in the U.S.A., the U.K., Japan and Germany in Indias market. Many sectors of the economy of the developed countries are faced with demand recession. The Indian market is thus seen as providing a way out to the western businessmen to dump their goods and services.
It is true that India’s stock markets these days are booming in expectation of liberalization and multinational investments. But most economic writers and experts are amazed at the ignorance of the stock market operators of the real state of the economy which is dogged by double digit inflation, a poor growth rate of industrial production and falling infrastructural facilities. The Indian government faces a massive five digit deficit. It has willy nilly to depend on external loans and adjustments for a long time. India finds it hard to discharge its loan service liabilities. India is in no position to tax the poor. It is also in no position to tax the industry. The former proposition is unproductive both politically and financially. The latter proposition, too, is unrealistic because the industry cannot mop up funds from capital markets and pay to the government at the same time.
The only alternative before the government is either to axe millions of jobs in public sector undertakings or prune the defence budget. Abolishing posts bristles with insurmountable difficulties owing to political clout enjoyed by trade unions. There has been opposition from hawkish political elements to the idea of curtailing the expenditure on the army and the vast internal security paraphernalia. Apart from the fact that Congress (I) has its own constituency in the organized white collar and blue collar while the Janata Dal left combine is, entrenched in sections of the employed class. The BP. i opposed to a cut in the defence and internal security setup. Discontent is growing among both the principal opposition supporters of the minority government; The government is rightly concerned about its fate in the event of some of its budget proposals meeting a combined opposition from the J. D left and the B.J.P parties in parliament. More specifically, the J.D LEFT combine is opposed to concessions 10 multinational corporations and is ready even to vote against the Rao government notwithstanding the fact that C.P.(M)s newly elected general secretary is the Indian establishments trusted man. The B.J.P too is upset over many aspects of the Rao government’s policies and postures. It does not want to be seen backing the Congress (I) t0 the point of damaging the party’s electoral chances.
All said and done the Rao government is face to face with a crisis. One reason of why the Indian government went ahead with its ham handed treatment of Punjab is the anxiety to win Jas many seats out of a total of 13 as possible to dispense with dependence on the B.J.P since the government J,D left gulf has grown to unmanageable limits. The government will be ting a battle of survival as it enters the parliament, Even if it survives this session, it will not be able to survive another. In any case, a midterm poll in India later this year is a district possibility.
“The chief failing of Indias present establishment in its inability to cope with the political mess left by the Nehru dynasty. India political institutions are unequal to the challenges that they have cropped up in the wake up of the disintegration of the only answer to the country’s political problems. The militarization is, however, antithesis of democratization and liberalization on the economic front. Indias biggest political at the moment are the uprisings in Punjab, Kashmir and Assam, No amount of external support to Indias economy can work unless the country resolves its political problems and |the related issues of militarization backed by nuclear arsenal.
These problems are bound to become unmanageable if the Sikhs tomorrow decide on curtailing the production and supply of wheat and rice to India. The western coururies have to be cautious about the real Indian scenario. They: should think twice before sacrificing human rights concerns in dealing with an uncertain India because in that case they will become ineffective in playing a role to help resolve India’s external political problems.
Article extracted from this publication >> February 28, 1992
