The current economic crisis, ostensibly caused by the reckless decisions of some key decision-makers in the US and elsewhere, could, to a significant extent, determine the Indian political landscape and policies in the coming year.
For one, among the biggest setbacks for the UPA government has been in the economic front due to high inflationary pressures to begin with, which in turn were caused by rising oil prices, followed by the unimaginable hardships to retail investors, besides threatening the jobs of many young aspirants who till the other day, were looking forward to bright career ahead. The terrorist attacks on an unprecedented scale, and sectarian violence in Orissa and Karnataka have only compounded the problem for the incumbent government.
To what extent is the UPA government responsible for such events is another matter. But, it is increasingly finding itself in a tight corner by the growing onslaught of opposition parties criticising it for the gross mismanagement of the economy and for its failure to act decisively, as the prime reason for all such ills plaguing us.
The Left parties can stage a coup by raising the bogey of the ill effects of globalisation, convince the electorate that they were right in opposing such moves in the past, and had it not been for them, the present government would have pushed ahead with its reforms thereby making the Indian economy much more vulnerable to such external shocks which would have caused far more mess today. They can base their electoral campaign on swadeshi and self-reliance, which would strike the right chord with the majority of the electorate, especially the middle class, who have had to face a major brunt of the global economic crisis besides being disenchanted with the overall deterioration in the economy, the law and order situation etc.
Irrespective of who forms the next government at the centre, the watchword would be greater overall regulation and controls, especially with regard to the participation of FIIs in our stock markets who have been instrumental in causing the recent mayhem, besides of course, greater regulation of the financial institutions which have a key role to play in the smooth functioning of the economy. This is not to suggest a return to the old ‘license raj’ regime or a closed economy, but more of an internal liberalisation whereby our economy is driven more by domestic institutions, and the overall dominance of the foreign entities is significantly reduced and highly regulated.
This time, there would be few voices of criticism singing lullabies in favour of a free market economy, and merits of greater liberalisation. After all, who would like to see an encore of the devastating effects of the excesses of some foolish decisions in the private enterprise with due blessings of the government and regulatory authorities, which can force the government to use the taxpayer’s money to socialise losses, while the profits remain privatised.
Navneet Dhawan, New Delhi
