Friday, March 05, 2010

Manmohan, The prince of inequity

Udayan Namboodiri is another good columnist on Daily Pioneer to go along with the likes of Swapan Das Gupta, Kanchan Gupta, Sandhya Jain and Chandan Mitra.

The Pioneer > Online Edition : >> The prince of inequity
“We cannot save people from inflation if we follow all along populist fiscal policies”. - Manmohan Singh

Singh had held every important economic office — Prime Minister’s economic adviser, RBI governor to Deputy Chairman of the Planning Commission — before the denouement of 1991

Naturally, as the man who has shaped India’s economy for the major part of the past two decades Dr Singh must bear the cross. When the Arjun Sengupta Committee, which he formed under pressure from the Left in the early days of UPA-1, reported that over 394.9 million workers, who make up 85 per cent of the working population, live on incomes of less than Rs 20 a day and that 88 per cent of the SC-ST-OBC and 85 per cent of Muslims make do with not even that, one had hoped that Singh would chart a truly inclusive course. But ‘inclusivism’ is like the original Congress bad-joke: “Garibi Hatao”—it boiled down to Garib Hatao.

In 2009, the Indian Statistical Institute reported that that since 2004-05, Singh’s first year as Prime Minister, rural poverty has grown 20 per cent.
Congress historians will tell you that India's economic growth story started with Rajeev Gandhi and its architect is Manmohan Singh. But as Udayan points out, apart from that blip when he was acting under P.V.Narasimha Rao's instructions, his own contributions to Indian economy have been cruelly destructive.

"Populist" policies like NREGA and farm loan waiver, which he personally has pushed for, had disastrous effects:
- It created fiscal imbalance.
- It pumped enormous liquidity into the system.
- It also increased wage inflation at the rural level.
- It benefited the privileged class of Congress workers through an organized and corrupt form of cash transfer.

The net result is inflation and inequality

The government could control overall inflation by fiscal measures. But the populist schemes introduced a dramatic increase in rural wage inflation and this is now being reflected in food inflation, which still hovers around 18%. Our economist PM's fiscal measures are not having much impact on food inflation and this is more or less expected. He can only hope that eventually the market will stabilize at the new levels. In the meantime, a few hundred million more will be pushed into poverty and the income disparity will increase. He has already overseen the growth of rural poverty by 20% and I predict that by the end of his tenure, this number will triple.

So, if you look at Manmohan's overall record, it is dismal. He has inherited a vibrant economy and introduced large income disparities and pushed millions of people into poverty. Udayan rightly calls him the prince of inequality.


Sudhir said...

The sad part is that such saner voices dont get reflected in the main stream media. The sick MSM's are just content with headlines like "PM-LKA spat" ... never go into the content of what the PM speaks (given that he seldom does that, shuldnt that make the job more easier? :D)

This PM has reduced his job to that of a desk job. Never interacts with people, nearly no policy decisions and above all does everything by stealth. But hey, he is "honest and decent" - how dare we question him? :D

on a lighter note, how dare Udayan calls him "prince". He will get sued soon, for that term has been copyrighted by......

- Sudhir

Anonymous said...

This is an excellent blog post. Manmohan Singh gets way too much credit for economic liberalisation, when it was PV Narsimha Rao who was the architect.

If you look at his actual policies, they have been very conservative.

Anonymous said...

I feel it's so easy to accuse sincere people who are working silently. How many of us really know what happens behind the scenes. Dr.MMS had to fight all the leftists economist and congress sycophants to liberalize the economy. It is sort of trend to characterize PM in all sort of vulgar names. This is fate of all hard working people who goes on doing their without expecting from it.

Sudhir said...

Dear Anonymous-2,

I am sure you must have quite well followed the politics during Narasimha Rao's time. You must be surely knowing that Manmohan Singh threatened to resign 3 times, and it was PVNR who did the political manuevering to help MMS stay.

Also, am sure you must have followed the fact that IMF insisted that these reforms be ushered in, else we are doomed.

I would have been more happier if you countered arguments with facts and not rhetoric in your comment. I don't fancy sitting at my home and abuse "hard working" people, nor do I believe that's what these bloggers do.

Each argument is backed with facts. What goes on behind the scenes might not be known to all, but from the final result, I believe it doesn't take an Einstein to figure out what went behind the scenes.

If MMS deserves credit, I don't mind giving him the credit. If he screws up, I will say so. Just because he does 1-2 good things, doesnt mean all his wrong doings are overlooked.

These are my personal opinions, and not in anyway connected to the writers of this blog. I am ready for a full fledged debate based on facts, and not on rhetoric. No one denies the post of Prime Minister requires extreme hard work, but a public office is not just about that.

- Sudhir

Xinhua Ram said...

Dinosaur eating snake
LiC is to The Hindu what this Snake was to the Dinosaur.

Anonymous said...

Namboodri says 'inequity', this post says 'inequality'. The difference may be significant.
Remember that the princes on aNNA sAlai and their retainers will seize on anything to discredit this blog.