People's Democracy

LAST week in these columns we had aired our apprehensions about the so-called economic revival plan pompously announced by the prime minister. He had then promised to infuse a sum of around Rs 75,000 crores as public investment. This would have helped strengthen the much-needed rural infrastructure as well as provided employment, thus boosting the sagging domestic demand. This in turn would have activated the economy and, at the least, may have slowed down the recession currently gripping our economy.

However, within 72 hours came the prime minister's meeting with his Economic Advisory Council, and promptly came the announcement that there would be no fresh public investment except for what has already been allocated in the budget for the year 2001-2002. These allocations, it must be recalled, had in real terms been much less than the already low allocations made in the year 2000-2001.

Clearly, neither the prime minister nor his economic advisors, least of all the finance minister, seem to have any clue about the revival of our economy. As they grope in darkness, they refuse to do the obvious --- to enhance public investment, generate employment and thus expand domestic demand. In their obsession with maintaining the levels of fiscal deficit they continue to contract public investment, thereby compounding the recessionary trend.

While this government gropes in the dark, unable to make up its mind on any meaningful strategy, vast millions continue to languish. Reports of starvation deaths continue to pour in, notwithstanding the cynical official response blaming these deaths on "food poisoning." The government continues to threaten the imposition of new labour laws that would be tantamount to more retrenchment and less employment opportunities. Disinvestment in the meanwhile, we are told, will be stepped up. Apart from selling family silver to meet the daily expenditure, which makes neither economic nor common sense, this would swell the ranks of the unemployed further. By these measures the common people’s purchasing power is bound to further decrease, thereby contracting the already low domestic demand. This can lead to nothing but an intensification of the current recession. The people have to pay the price with growing misery. The only way to end these conditions of increasing misery and impoverishment is to rid India of this Vajpayee government whose three years have spelt ruin in all spheres.