PC needs reboot – Ravi Shanker Kapoor

Finance Minister P. Chidambaram is known as a liberalizer in the United Progressive Alliance (UPA) government. Though he hasn’t done as much as one would have expected him given the grim economic scenario and the grimmer fiscal deficit, he did manage to curtail some expenditure in the last fiscal; the revised estimate of total government expenditure was 96 per cent of the Budgetary estimate. But he has done too little and too late; his other Cabinet colleagues have either not done anything positive or have actually hurt the cause of the economy (remember Jairam Ramesh?).

Yet, Chidambaram seems to believe that he would be able to convince global investors to come to India. He wants foreign direct investment (FDI) to flow into the country. Addressing the international media in New York, he recently said, “We as a country can easily absorb $50 billion investments [in] a year or more. In the hierarchy of foreign inflows FDI ranks first, followed by FII and external commercial borrowings. FDI is important to India too as in any other country.”

Did you say $50 billion, Mr. Minister? Well, some reality check is called for. Consider the Posco project in Orissa as a paradigm case—the paradigm of the UPA regime’s perversity. The Korean steel major began its odyssey, or ordeal, around the same time the UPA came to power for the first time. It pledged to invest $12 billion.

Typically, a rainbow coalition of professional revolutionaries, garrulous jholawallahs, incorrigible naysayers, and downright Luddites attacked the proposed steel plant. Worse, their opposition to the project does not emanate from a genuine concern for the locals, something that could have been sorted out; their resistance was is doctrinaire: the project is bad because it would ruin the environment, exploit the tribal people, etc. Period. No discussion, no dialogue. Posco has to go.

What was even worse was the UPA government’s mollycoddling of the elements determined to drive Posco out of India. Ministers like Ramesh brazenly encouraged the radicals who are hell-bent on de-industrializing India. Then there are anti-business bigots in the Sonia Gandhi-headed National Advisory Council (NAC). In July 2010, a 10-member committee under NAC member N.C. Saxena visited Orissa and made public announcements about the violation of the Forest Rights Act (FRA) by the state government and transgressions by Posco. The FRA, it may be mentioned, is another mischief of the NAC—ostensibly meant to safeguard the rights of tribals, the legislation has become a big hurdle for development.

The jihad against Posco is unrelenting. Recently, The Times Of India reported (April 16), “A high-level committee set up by the Union Ministry of Environment and Forests (MoEF) to review the mega Posco steel project in the state has spelled fresh trouble… The committee headed by K. Roy Paul was constituted as per the March 30, 2012, order of the National Green Tribunal (NGT), which had suspended the environment clearance granted to the project.”

Notice the preposterousness of the situation. Here is a foreign company willing to set up a project that would create thousands of jobs, bring prosperity, and fatten the exchequer in one of the poorest states in India. But the country’s government is doing everything within its power to scuttle the project!

And the country’s Finance Minister tells investors in New York: “I am here to talk to investors who are showing positive response. I am here to make sure that they continue to remain invested in India and to increase their allocation to India.” Perhaps, he thinks that international tycoons don’t read newspapers or that they are ignorant people. Either Chidambaram is very clever or global investors are very foolish.

He kept repeating fairy tales about India. In an interview, he said, “I think the right way to look at it is we are not restricting. We are opening up in a gradual manner. Where were we in 1991? What are we today, in 2013? In the space of 22 years we have opened practically 90 per cent of India’s economy.” Quite apart from the exaggeration involved in the 90-per cent claim, there is the problem of interpretation. Yes, India is much better in 2013 than it was in 1991 in economic terms. This betterment, however, is the consequence of what happened between 1991 and 2004—Chidambaram did play some role in it—and not what has happened since the UPA captured power.

After becoming the uncrowned empress of India, Sonia Gandhi has not only sought to revive—often successfully—the worst features of the pre-liberalization era, but chalked out newer and more dangerous socialist measures like the rural job guarantee scheme and the proposed food security legislation. She and the circus around her, the NAC, are solely responsible for the doom and gloom in the economy. Chidambaram and other reformers have not covered themselves in glory by letting Sonia and her twerps run the show.

An astute politician like Chidambaram should also know that the rules and regulations spawned by NAC types have also given a fillip to rent-seeking. After all, socialism is the crony of venality.

But Chidambaram likes all of us to ignore these facts. One wonders if he himself takes all the relevant facts into account. In New York, he said, “In fiscal 2014-15, India wants to go above 7 per cent. Fiscal 2015-16, we want to go back to our potential growth rate, which is above 8 per cent.” But we would to be enlightened to know how he would perform this miracle. With Sonia and her lackeys going berserk and efforts being made to uproot all investment domestic as well as overseas, how can we enter the 8-per cent orbit?

It is time Chidambaram woke up and acknowledged the evil Sonia and her gang are determined to perpetrate.

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