The UPA government has expressed confidence that it will win the FDI ( foreign direct investment ) vote in parliament. India is one of the most complex countries in the world, especially when it comes to the functioning of its political system. Parliamentary arithmetic may well save the UPA government. However, Prime Minister Singh, Finance Minister Chidambaram and the Indian National Congress Party have betrayed a sense of desperation by allowing majority foreign stakes in multi-brand retail. Since retail isn't manufacturing and the entry of foreign retailers in a big way can cause irreversible harm to domestic retailers, the costs to the Indian economy may well outweigh the benefits. After trying to draw comparisons between the current situation in India and the early 1990s, why did Prime Minister Singh resort to something like FDI in retail, whose benefits are questionable and whose potential to cause harm are non-negligible, as one of his and the Congress Party's major advertising items ? It seems there is a lack of quantitative thinking in the way crisis situations in the Indian economy are being tackled.
The UPA government may survive the FDI vote, but the country will still be left without convincing answers to its economic travails. There is a lack of stress on the country's internal economic strengths. Instead, there is an over-reliance on possible foreign capital, and there too, the approach is not very clear or comprehensive. And it smacks of elitism. Given how India's GDP growth has failed to bring the desired levels of improvement in living standards for the broad masses, this approach, that is elitist both in reality and in appearance, can prove to be politically costly for the Congress Party.
by C. Jayant Praharaj ( send comments to [email protected] )
The UPA government may survive the FDI vote, but the country will still be left without convincing answers to its economic travails. There is a lack of stress on the country's internal economic strengths. Instead, there is an over-reliance on possible foreign capital, and there too, the approach is not very clear or comprehensive. And it smacks of elitism. Given how India's GDP growth has failed to bring the desired levels of improvement in living standards for the broad masses, this approach, that is elitist both in reality and in appearance, can prove to be politically costly for the Congress Party.
by C. Jayant Praharaj ( send comments to [email protected] )