Of rallies and smokescreen

There is a clear disconnect in the assertions of the scion of the Gandhi family Rahul Gandhi and Prime Minister Manmohan Singh. The Congress is giving a sense of hiding behind the smokescreen created by the Prime Minister, which perpetuates crony capitalism. 

“Maen jaantaa hun ki aap log system se tang aa chuke haen…aap log system maen change chaahate haen…maen aapke saath iske liye khada hun (I know that you all are fed up with the system and want a change and I am standing with you all for this),” the Gandhi scion and heir to the political legacy of the Congress, Rahul Gandhi, trumpeted at the Ramlila Ground.

My ears instantly plugged in to sound boxes blaring out Rahul’s speech, as I forced my way to the front of the ground. But for a moment I doubted if my ears were hearing properly. Rahul was with those who are fed up with the system!

Since 1947, the Congress has ruled the country barring the phases of 1977-1980, 1996-2004 (eleven years in all). Further, Jawahar Lal Nehru, Indira Gandhi, Rajiv Gandhi (all from the first ruling family) have headed the governments. So, “system” is very well the product of the hegemonic rule of the Gandhi family. But Rahul wants to change it; good to hear this.

Earlier, Rahul blared “the Congress was a party of a dozen people until Mahatma Gandhi opened its door for the mass”.

Having been a student of history, Rahul’s statement was clearly a new revelation.

A number of history books, including the government censored NCERT books, mention glowingly of the contribution of the likes of Dadabhai Naoroji, Bal Gangadhar Tilak, Lala Lajpat Rai, Gopal Krishna Gokhale and many more before Gandhi appeared on the horizon. There were definitely more than a dozen people in the Congress.

“After Gandhiji opened the doors of the Congress for the mass, the English ran away to London,” Rahul further blared out.

The history is, however, less dramatic. Gandhiji came to India in 1915 and the English left India in 1947; and there lies a whole 32 years in between.

Therefore, I too wish to open the door of the Congress for the mass, Rahul continued. So, Rahul also wants to do a Mahatma Gandhi for the people; but he should have explained why the mass deserted the Congress in the intervening period.

But Prime Minister Manmohan Singh, speaking after Rahul, listed the achievements of the government and mentioned hard pills that he has administered to the ailing Indian economy. “Manzil pahunchane ke liye abhi kaaphi lamba safar karma padega (destination is still far away and will have to undertake a long march),”

Prime Minister was clearly not buying the “change the system” slogan of Rahul.

Speaking last, Congress president Sonia Gandhi took pains to say “aajkal galat khaboron ki aandhiyan chal rahi haen (these days the storm of wrong news is blowing)”. Poor Rahul; neither the Prime Minister nor the Congress president subscribe to his views to change the system.

The world acclaims Manmohan Singh as a top ranking economist. So, his analysis of Indian economy should be seriously paid attention to. But what he offered as defence for allowing FDI in multi-brand retail baffled whatever little understanding of economics I had.

Sample it. “In cities like Delhi, domestic companies are already into multi-brand retail. By allowing FDI in multi-brand retail, people in smaller cities will benefit,” he said.

But what about the concerns, that the sharks of the multi-brand retail, like Walmart, Carrefour, etc, would siphon Indian wealth abroad and capture Indian market for foreign products. No answer from the Prime Minister.

“This will ensure that the wastage of foodgrains is curbed and farmers get the right price,” the Prime Minister said.

The government is sitting over more than 90 million tones of foodgrains this year alone, which is more than double the prescribed buffer limit. The wastage of foodgrains is due to incompetence of the Food Corporation of India and not the other way round.

Member of the Sonia Gandhi headed National Advisory Council (NAC), N. C. Saxena, who is considered a top ranking poverty expert, is of the view that the government should release the stock of the foodgrains in the market, either through open market allocation to bulk buyers or through the public distribution system. This will address to the demands of the food security and curb price rise.

But the Prime Minister reminds that the rising subsidy burden would make India unattractive for foreign investment and claims that wherever FDI in multi-brand retail has been allowed both the organised and small retailers have flourished.

For over three years, the UPA managers have been struggling to curb the runaway subsidy. A union minister is of the view, that if the government stops the subsidy given to corporate (cheap 2G spectrum, coals, land, etc.), the subsidy for the welfare scheme will not be a pain at all. The Prime Minister may well be accused of hiding behind a smokescreen.

A number of Asian tiger economies, including Malaysia, Indonesia, Thailand, who had to open their retail market for FDI as part of a World Bank bail out package in 1990s, have seen the large retail business growing in double digit, while the small retailing has shrunk. So, they have begun to take a number of remedial measures now, which, however, India is oblivious of.

As we took out a long walk out of the Ramlila Ground, a fellow scribe summed up the grandiose exercise of the Congress in demonstrating its show of strength. “People are walking over all these pamphlets with pictures of Manmohan, Sonia and Rahul. What respect people have for these leaders,” he said; and I took a hard look at the street littered with pamphlets crushed under the feet of teeming flow of people mobilized from Haryana and Rajsthan.

Manmohan steamrolls "reforms"

Simon Denyer of the Washington Post with his article headlined "India's 'silent' Prime Minister becomes a tragic figure" appears to have woken up Dr Manmohan Singh from his deep slumber. In a span of two days, Singh has steamrolled all opposition to roll out market friendly reforms measures. It appears that vintage Manmohan is back, though too late to undo the damage done so far due to policy paralysis.

First, Singh touched the holy cow in diesel and LPG subsidy. Both have been hit, so that they could be linked to market prices in future. The two politically sensitive issues had been red-flagged by UPA alliance partners time and again. Secondly, FDI in aviation and multi-brand retail were also approved. The lavish menu spread by Singh also included disinvestment in public sector units.

Importantly, Singh has gushed these "reform" measures, after his colleague and former Finance Minister Pranab Mukherjee exited his Cabinet to enjoy the comforts of the Raisina Hills. Also, Singh's confidence apparently comes from P Chidambaram as the Finance Minister. Chidambaram had been the darling of the market for years. So, stock market has been singing to his tunes since he took charge of the Finance ministry.

After knotting India into a nuclear pact, the US had been desperate to get the FDI route in multi-brand also opened. The grapevine had been that in the last days of Mukherjee as the Finance Minister, within an hour of his landing in the US to attend a function, a concerned Hillary Clinton had rung up him to ask when was the FDI in multi-brand retail being approved. Mukherjee is said to have responded saying that he was in the US for some other function. 

Also, every criticism of the Manmohan Singh government invariably ended with one prescription, that the FDI in multi-brand retail should be allowed. Such has been the noise in its favour, that top policy makers of the UPA have opined that the FDI in multi-brand retail can solve all woes of India; fighting inflation, curbing unemployment, getting good prices for farmers. So much so that the Gandhi family scion had taken recourse to arguments like potatoes, which were wasted by farmers in Uttar Pradesh, would fetch better price once it was allowed. 

The clamour for FDI in multi-brand retail could well be understood by the fact, that it allows the US and others to tap the Indian market in big ways. The collateral damage would be loss of jobs in the existing retail trade and likely cartelisation of the retail market once the sharks of the world kill millions of small shop-keepers. Also, many of the American consumer produces currently having no demand in India would on the shelf and backed by aggressive marketing a new market would be created for them.

Therefore, Singh has done great favours to the US. First, he revived the "dead" nuclear industries there and now he can revive the job market there.

Secondly, FDI in aviation may not be much of a concern for most. Because, the inabilities of Indian airlines operators have demonstrated that they needed the FDI booster. But the same can not be said for the multi-brand retail where money, technology and management do exist within Indian companies. 

However, Singh has taken the high road to steamroll his "reforms". But his highway is full of potholes. The Trinamool Congress chief Mamata Banerjee has been a sworn enemy of FDI in any form. The Samajwadi Party would not be able to face people in UP if Akhilesh Yadav allows FDI in multi-brand retail. The Opposition is already baying for the blood of the UPA. 

The urgency with which Singh has pushed through his "reforms" signal two things; firstly that the mid-term poll is very much on the card and secondly these steps are of a ruling class fast drowning and needs anything to clutch onto.