Communist
Party of India (CPI) parliamentary group leader and CPI National Council
secretary Gurudas Das Gupta has said that the UPA-II
government has miserably failed over the years to stimulate inclusive growth
and rather did not succeed even to maintain the rate of GDP growth attained
earlier, which is today at an all-time low of 5.3 per cent. It could not
even hold the price line mainly of the essential commodities including food
articles.
The
veteran parliamentarian, also the AITUC general secretary, made these
observations in his dissent note on the report of the parliamentary standing
committee on finance concerning the present economic situation, submitted on
August 29, 2012.
Unfortunately,
the standing committee’s draft report as prepared failed to critically examine
the fundamentals of the economic policy and suggest effective alternatives
instead objectively approved the policy that has been pursued by the government,
he said. “It does not even refer to the futility of the policies and
non-performance of the government. In my view, the committee did not
discharge its responsibility by patting on the back of the government.”
Saying
that the present crisis cannot be attributed solely to the international
crisis, second in two years, Dasgupta said that the present policy of unguarded
liberalisation, reckless privatisation, unusual dependence on foreign funds,
over dependence on export market, failure to curb speculation in a situation of
scarcity, its total inability to provide economic empowerment to a vast section
of the majority of the people, galloping disparity of income and increasing
unprecedented concentration of wealth in the hands of the few form the basic
negative feature that has been overlooked by the committee.
The
report speaks of “economic
incentive regime for accelerating and sustaining growth.” It also states
that “the
committee, hence recommend that the FDI policy may be reviewed by the government
to ensure the above and make India an increasingly attractive and investor-friendly
destination for foreign investors.” It further says: “Our policies should
attract more long-term capital inflows and push investments through reforms.”
Thus,
the CPI group leader pointed out that the observations clearly approve the government
of India’s
FDI-friendly policy of economic reform, spelling out the undeniable message
that it is the foreign investment that will engineer the process of accelerated
economic growth obviously taking care of the basic human problems. “This
proposition has not been found to be correct anywhere in the world. The committee
rejecting all the Indian realities, by implication seeks to strengthen the
hands of the government to bulldoze its people-unfriendly economic
reform. The report will give a free hand to the government to allow FDI
in the retail trade, further tax concession to the corporates in the SEZs, it
will lead to more violation of labour laws and enable the government to infuse
FDI in the banking and insurance having proportionate voting rights. In
the name of attracting foreign funds it will bestow more concessions
undermining the national interest, making India the most attractive hunting
ground for the international players looking for unlimited profits exploiting
national resources and manpower.”
Stating
that primarily the growth of the economy depends on national resources augmenting
progressive tax revenue, broadening the tax base, reducing the tax concession,
holding up tax avoidance, by waging all out war to retrieve black money,
curbing unaccounted income, effectively fighting corruption and reducing
wasteful expenditure and relocating priorities in the process of budget making,
he said that nobody is denying the role of FDI in national development, which by all means is
subsidiary.
The direction of the report, which is extremely flawed is stereotyped and does
not search for alternative policy which the nation is looking for. There is no
word for stimulating the domestic market, enlarging the empowerment of the
marginalised majority.
The report in the background of the agricultural crisis does not call for heavy
public investment in agriculture, only asks for ‘infusion of funds’ without indentifying
the source of funds. While investment in agriculture has been dwindling
down over years, both public and private, the report does not “look beyond the nose,
makes a superfluous comment on the need of infusion of funds, which is unlikely
to happen.”
“Nevertheless
it is correct to say that private investment has a crucial role in a mixed
economy like India. But in a situation of gloom and downturn, it is
massive government investment targeted to augment the income of the common
people, for creating job, ensuring stability of income of the disadvantaged,
even incurring budget deficit can turn around the economy. Heavy
government investment will stimulate the market, generate the income, improve
aggregate demand and as a result market shall look up creating the atmosphere
for the inflow of profit oriented private investment, even draw foreign
funds. Unfortunately, the alternative perception is ignored and discarded
by the Report and in fact it strengthens the hands of the government to carry
forward the present anti-people economic policies”, the dissent note adds.
Criticising
the government for recommending the sale of family silver to meet the grocer’s bill, he said that the
report suggests disinvestment for raising revenue, when the market sentiment is
so negative. “The Committee unfortunately goes so far as to suggest 10 per cent
reduction in the non-plan expenditure which essentially suggests to reduce
subsidy obviously hurting the common people. This is quite in line with
what the present government wants to do. In the name of quoting RBI, the
report puts on record with concern the question of overshooting of subsidies.”
The
committee, he says, “even refers to with concern the impact of ‘retrospective tax
laws’ and
‘general
anti-tax avoidance rules’.
It calls upon the Government to modify/withdrawal these laws so that investors’ interest is not
hurt. It calls upon the government for the speedy enactment of the
financial reform Bill including Pension Fund Regulatory and Development
Authority Bill, the Companies Law Amendment Bill. The report undoubtedly
shall be a feather in the cap of Dr Manmohan Singh’s government.”
The
report in the name of strengthening the health of the banks “seeks to permit
the government for going for merger of the banks undermining the national
interest. It also opens the door for private investment in banks diluting
its public sector character.”
Since the report is one sided, seeks to strengthen the hand of the government
in pushing through all its corporate friendly reform programme at the cost of
the interest of the people, since the report does not locate the fundamental
anachronism in the economic policy that has led to a situation of slowdown and
food inflation, almost taking the country to the threshold stagflation, since
the report is in fact an apology for the inaction of the government and since
the report does not find any fundamental flaw in the policy and refrains from
outlining people friendly suggestions Dasgupta made it clear that he has no
other alternative but to put on record his dissent. “It is unfortunate
that the report is likely to serve as a readymade weapon in the hand of the government
to defend its failed economic policy running the country.”
