Apropos of the write-up Economics of the real world (October 4), the plight of todays industries is the creation of the countrys chambers of commerce and their members. It was to hide its past economic misdeeds that the government sold the dream of economic reforms, but they over-sold the concept. Foreign investors were invited not to manufacture export-oriented products or to bring hi-tech industries, but to buy the equities of Indian companies and manufacture consumable products and reap lavish profits. Thus the flood of funds became a bonanza for industrialists to help them manipulate stock prices and to tempt rural illiterates to become stockholders. The pubic sector too was busy collecting funds. There were plans to sell certain scrips on railway platforms like snacks. In short, enormous funds were flowing in from all corners. Those who could lay their hands on them were busy praising the reforms.
But then an investment of, say, Rs 100 crore a few years back is worth only Rs 20 crore today. Thus, funds from rural areas dried up. Today, competition in marketing consumables has multiplied, and obviously Indian industries are losing. In sum, industries have been forced to produce less and sell at a high price to survive.
The manner in which the reforms are being carried out has been of great advantage to countries like China. Thus, it can be said that while India reforms, others perform.
