Rediff Logo Business Banner Ads
Find/Feedback/Site Index
April 29, 1998


Only Indians, not foreigners, are exercised over swadeshi: FM

Send this story to a friend

Amberish K Diwanji in New Delhi

Yashwant Sinha is a busy man these days. He barely concluded his pre-budget meetings on Tuesday when he had to rush to the Confederation of Indian Industries seminar. Later on in the evening, he flew to Davos for a meeting with the Asian Development Bank.

At the CII annual session, he declared that the subject of swadeshi(economic nationalism) was something that bothered only Indians and not foreigners. "Nobody abroad has ever complained or asked me aboutswadeshi," he pointed out. "I simply told them that some areas are priority and some or not, and they accepted it. Only Indians get worked up about swadeshi and the fear that this will drive foreigners away."

Sinha said a recent survey had claimed that 78 per cent of Indians support swadeshi and that most captains of industry (many of whom must have been present at the session) categorically backed it. "Swadeshi is not xenophobia," he thundered, "It is just pride in ourselves, in our ability to do what needs to be done."

Sinha was heard in pin-drop silence (broken by the irritating buzz of an occasional cellphone). Speaking about his pre-Budget discussions, he pointed out that in his meetings, he had received three requests: give industry greater sops by reducing various revenue charges on them; spend more to kick-start the economy; and to cut the yawning fiscal deficit pegged at 6.1 per cent of the economy! "However, I accept the challenge and there is no running away from it," he said.

The key to meeting all the three requirements was two-fold: increasing tax compliance and increasing productive expenses. The finance minister made a relevant appeal to all those present to pay their taxes. "It is your patriotic duty," he said. Sinha assured the industrialists present that under no circumstances would he unleash the tax collectors upon them or allow the collectors to harass them. "The earlier adversarial days are over," he said, "I seek your partnership in my endeavour to ensure growth, more growth, and still more growth."

Whether the FM's impassioned plea cuts any ice with the hard-boiled capitalists, notorious for avoiding taxes under any number of pretexts, remains to be seen. Certainly, they were lapping up his words and nodding their heads in agreement.

Sinha was finance minister in the four-month-old Chandra Shekhar government in 1991, when India faced an acute balance of payment crisis. In fact, so bad was India's condition that the Reserve Bank of India had to airlift gold to the Bank of England as a security against loan default. "In 1991, when I presented an interim Budget, the fiscal deficit was six per cent. Today, when I presented another interim Budget -- I am becoming quite an expert on interim Budgets! -- the fiscal deficit is still at six per cent. So how much have we travelled in the past seven years?" he asked.

Pinpointing the problem, the finance minister said the cause was an increase in revenue expenditure at the cost of capital expenditure. "At some point or the other, economics gives way to politics and the path of least resistance is followed by various governments," he declared. "That is why it is imperative to build a consensus among everyone on the course of reforms."

Earlier, Union Industries Minister Sikandar Bakht spoke of the importance of teamwork. He recalled his days as a player in a hockey team that never won any tournament. "Then I became captain, and with the same team, won 13 prizes the first year and 17 the second year," he said. "The secret was that I brought in teamwork." To this, CII president N Kumar was to later say, "Sir, you lead the team and we will certainly win all those awards!"

Bakht spoke along expected lines and said his door was always open to suggestions from the captains of industry to help revive the economy.

However, if there was one person who must have made the capitalists squirm in their seats, it was Communist Party of India general secretary A Bardhan. The Communist veteran began by declaring that he was on the dais as an ordinary citizen, and then went on to blast most aspects of reforms, insisting that there was no need for disinvestment in the public sector.

"If we allow all the consumer goods in the country, who will benefit?" he asked, and then went on to reply, "The multinationals and the measly 100 million who constitute India's middle class."

He appealed to the "patriotic" Indians not to reduce the country to a mere market or all Indians to consumers. Bardhan also debunked the trickle-down theory and the free market theory. Thankfully, he did not praise Das Kapital on-stage, but insisted that planning was a prerequisite to achieving growth.

He insisted that the Communists were in support of reforms, but the question was what kind of reforms. He ridiculed Sinha's statement (reportedly made in the United Kingdom) that swadeshi was not against foreign investment.

When the session was thrown open for questions, there were none.

Tell us what you think of this report