By Arabinda Ghose
DESPITE the otherwise condemnable act of the UPA government in inducting tainted ministers in the Council headed by Dr Manmohan Singh, one welcome feature of the UPA government has been the induction of P. Chidambaram as the Minister of Finance. Not that Chidambaram has an impeccable record in politics, but he at least, is the face of economic reforms and is not a slave of outdated and meaningless dogmas.
But then, though he may not be a slave of the redundant Marxist dogma, the UPA certainly is. It was only a month ago that West Bengal Chief Minister, Buddhadeb Bhattacharya had declared that the UPA government would stand up when he asked them to do so, and sit down when “we order them to take their seats”. One only hopes that Dr Manmohan Singh and Shri P. Chidambaram have dismissed this arrogant declaration with the contempt it deserves and dismiss all suggestions from the Left on how to run the economy as arrant nonsense.
Even the bitterest foes of the NDA—except of course the communists who still live in the nineteenth century—will agree that the National Democratic Alliance government has left a very sound economy for the country. (We will come to the suicides by farmers a little later). The rate of inflation was below 5 per cent when the NDA lost power, the foreign exchange reserves were upwards of $118 billion, the buffer stocks of foodgrains were much higher than the minimum requirement and agricultural production was on the upswing.
On the foodgrains front, according to the latest estimate published by the government on June 11, the stocks stood at 31.75 million tonnes on May 1, comprising 12.72 million tonnes of rice and 19.033 million tonnes of wheat. The buffer norms for this date were 11.80 million tonnes of rice and 4.0 million tonnes of wheat. (The procurement of wheat by Central and state agencies took place in May and June and the July 1 figure for wheat will certainly exceed 15 million tonnes).
Even the bitterest foes of the NDA—except of course the communists who still live in the nineteenth century—will agree that the National Democratic Alliance government has left a very sound economy for the country.
As the Central Statistical Organisation (CSO) comes out with such figures as the growth of the industry, and various public and private sector corporates come out with their annual statistics, it is becoming clear that the economy of the country did not suffer at all during the six years of the NDA rule. Take the Steel Authority of India Ltd (SAIL). It has just turned into black after years of being in the red. This story is similar to the achievement of the NDA government in the coal sector in which the loss of about Rs 1,700 crores was converted into a profit of Rs 1,300 crores in just one year.
According to the CSO, industrial production during April 2004 has been 9.4 per cent over that during the corresponding period in the previous year, showing the trend for the entire year. (The NDA lost power only in May 2004.)
We will now deal with the issue of suicides by farmers in the two states which had dominated the electoral results in them—Andhra Pradesh and Karnataka. The disaster suffered by the Telugu Desam Party and the BJP in Andhra Pradesh has hogged the headlines the most, mainly because the counting of votes in Andhra Pradesh had to be taken up on May 11, two days before the counting began in the rest of the country. Since the Andhra Pradesh results were so drastic, people remembered only those results, totally ignoring the fact the Congress Partyled coalition, which had come victorious in Andhra Pradesh, had suffered the same ignominy in Karnataka.
One must remember that the two states have been suffering from inadequate rainfall for the last three to four years at a stretch, despite the overall normal rainfall in the rest of the country. Tamil Nadu, even Kerala and the southern districts of Maharashtra, too suffered the same fate, and in all these areas, the ruling parties (the Congress and the NCP) have had to pay the price of drought by losing seats. In Kerala, the Congress did not win even a single Lok Sabha seat. There was unprecedented drought in Kerala too.
And now comes the report of starvation deaths of five tribals in West Bengal, the ‘paradise? created by the Marxists in the last 27 years. Admitting this deplorable incident, Chief Minister Buddhadeb Bhattacharya told mediapersons on June 14 that one need not go to Amlashole (the village in West Midnapur district where the starvation deaths took place) to report on starvation deaths. They could come across such deaths in Kolkata city itself, in the slum areas of the city.
The suicides by farmers, heart rending as they are, have been triggered mostly by failure of crops owing to lack of adequate moisture in the soils. This again is the result of negligence on the part of the state governments to arrange for irrigation, which they have failed to do mainly because of the lack of availability of water in the dams and other irrigation structures, caused by the failure of the rains. This situation can be met only by transporting water from the surplus to the deficit areas. This, however, is a different subject and has to be discussed by the political parties themselves. The NDA government has revived the inter linking of rivers concept as a solution to such problems.
The nomination given to former Disinvestment Minister, Arun Shourie has removed doubts from the minds of the people that the BJP has given up sound economic reforms adopted by the NDA government. Arun Shourie has explained a number of times that selling off of profit making public sector under takings did not affect the economy and the very fact of profit making has to be considered in a larger context of overall performance of the public sector. Short sighted and Marxist oriented philosophy, of the public sector occupying the ‘comanding heights of the economy?, is outdated and not applicable in the 21st century.
There is another aspect of the populist economy that some parties including the Congress glorify, which can have disastrous consequences in the future. This is about the supply of free electricity to farmers. This is as disastrous as providing free liquor to people first and then destroying their economy and life by making them addicts. The various implications of free electricity supply for farmers can easily be tabulated by any economist, but not by politicians hungry for votes.
For one thing, when farmers are given electricity free, it is the other non farmers including the poor, who pay for this scarce commodity in today'sIndia. Secondly, free electricity encourages loss of power and inefficiency of irrigation pumps. Thirdly, as one is becoming painfully aware in Punjab and Haryana, free electricity encourages unlimited extraction of water for growing foodgrains such as paddy, which in the first palce should not be grown in these two states at all. Although both states are now engaged in the row about the Satluj Yamuna link canal, they should not ignore the threat being caused to their lands by needless production of paddy there. Needless because deficit rice consuming states have almost become self sufficient in rice now (Assam is one good example); less water consuming crops such as maize, pulses and kharif oilseeds should be grown in place of paddy. This will lessen the need for water and would also prevent desertification of the land in Punjab-Haryana.
One hopes that Shri Chidambaram takes into account all these factors at the time of presenting his budget for 2004-05 in the second week of July, and not succumb to Leftist pressure to take the economy back by a hundred years.