The Big Bang for Reforms

The loudest statement made in the recently washed away monsoon session of the Indian parliament surprisingly was Prime Minister Manmohan Singh’s insistence on silence. While blaring opposition continued to accuse government of everything and anything, Singh answered his critics by remaining silent.

By hiking diesel prices, introducing a quota system for Liquid Petroleum Gas cylinders, allowing 51% of foreign direct investment (FDI) in the retail sector and opening up other sagging sectors like broadcasting and aviation, Singh has taken the boldest decisions in his second term as Prime Minister. Aimed at giving the right impetus to the gloomy economic scenario and restore global investor confidence in Indian growth, Singh has decided to set things right the hard way.

Detractors and opposition have responded with protests including some of the United Progressive Alliance allies hinting at drastic steps if the government doesn’t reverse these policies. But not to buck under any pressure this time, the premier is resolute in going ahead with these much-needed measures.

Rather than going ahead with these actions in a high-handed manner, the government has actually been sensitive to the needs of different states and territories in India. The policy clearly sounds out that only cities with a million strong population will be eligible to attract FDI in retail. It also allows the respective state governments to decide if they want to allow it in their state or not. This is definitely in a good federal taste as each state will be given the interface of the global forces by the Union, and it is up to them to take it or leave it.

Any matter that concerns the crossing point of the external forces has an inbuilt fear of the “foreign” factor as the “other owing to our deep nationalist ethos.” However, this mistrust is uncalled for as their 30% local procurement guideline and the firms that invest in back-end infrastructure shall be allowed for multi-brand retailing. This is not the first time that India has taken a bold measure; previously we opted for liberalization of the economy and the government left no stone unturned to factor in the social safety and other security nets. Considering all these safeguards that the government has kept in mind, opposition’s statements against these bold moves sound mere rhetoric.

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It is time that our federal polity taps in these benefits of globalization with due co-operation between the union and the states. In the neighboring vicinity of China there were large-scale protests before FDI in retail, which were later answered by the benefits of economic growth. Newer outlets will spur a boom in real estate sector, provide jobs, offer goods at lower price and not necessarily spell the doom of local grocery stores. Just as local Indian food retail outlets Haldiram’s and Nathu’s didn’t vanish from the face of our markets with the advent of McDonald’s and KFC, there is no reason to fear that neighborhood markets will be wiped out with the entry of global retail giants like Walmart and Tesco.

With cut throat competition among various brands, ultimate beneficiaries will be millions of consumers. India’s aviation sector will receive a major boost with the entry of international players and fliers will receive world-class experiences without burning a hole in the pocket. The corporate world, global markets and Indian share markets have responded in a positive way to these decisions. The rupee too recovered against dollar. This impetus was the need of the hour.

While doubts and suspicions are good and pave the way for healthy debate, rhetoric and rumor mongering stall the development of any nation. It is time we acknowledged government’s sincere desire to bail the country out of this economic mess instead of playing politics. As they say when the going gets tough, the tough gets going. For once opposition should stand behind the government and applaud Prime Minister Singh for showing courage at this time.

Dr. Amna Mirza is an Assistant Professor in Political Studies at a College in University of Delhi. Read more articles by Amna.