The govt under Prime minister Man Mohan Singh has suddenly woken up to the need of reforms after the Wallstreet Journal mentioned in an article that the performance of our PM was very lack lusture. This may have hurt the pride of Mr Singh but this should never be the case that foreign press is taken seriously while domestic press or public opinion is taken as lightly as it can be.
I now come to next point that whether the reforms that have been initiated are called for, for the treatment of a slipping economy. I would think that all is in vain and nothing concrete and good will emerge in the long run on account of the reforms so far undertaken including the today’s announcement regarding the raising of the FDI limit in insuance sector to 49% from 26% and also giving the go ahead in the same fashion for the Pension Sector. There is also an approval for passing the new companies’ bill.
Earlier the petro sector was dealt with in a way which goes just half way of the required reforms there. The ectricity sector reform has been initiated but there also it seems full measure has not been applied. The FDI in retail had been okayed but this is one reform that may actually prove detrimental in long run.
What can easily be observed that foreign money has been allowed to come in, in very many ways . That has reflected in stock markets showing very encouraging trend. The rupee has gained value. This is natural outcome of what govt did but is it a development that changes nothing fundamentally. The only thing that would bring any sort of real push to economy is prudence in public expenditure. The plugging of leakages here and there is another necessecity. The files need to moved faster and honest not be punished just for they would not yield to wrong demands by powerful in the set up. Nothing of these things seem to be happening unless the electorate show their serious displeasure by giving a verdict that does not favor any of the unethical people in domain of public service.
In fact the capital from the world market is desperate to get into such economies that would give higher returns . As India fits that bill, it has been pressurised to give more space. Now it is simply allowing emplyment of capital which is unemployed else where. This should have been done after precise promises that surplus human resource would be allowed to enter other economies of the west where there is opportunity of employement. This hasn’t been tried. So a natural doubt comes to mind that all these measures may not be just for the love the our country. What has been seen so far in matters of governance , nothing is unexpected of this team.
In the end the whole scenario sends shivers down my spine as the volatility will be so much more in coming times. The apple cart of ordinary individuals may well be up set.
Next worry for me is that the sharp shooters may allow insurance and pension funds to apply greater portion of the funds to buy equities. This might be done when the markets are at dizzy hight and the FII or other savvy people require an out let for their investments. The stealth is a tool so deftly employed by big money, therefore I never see big money as purely clean money.