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Home > Business > Business Headline > Report

Govt puts reforms on the back-burner

Ajay Singh in New Delhi | May 05, 2003 14:18 IST

Even as Union Commerce Minister Arun Jaitley argued vehemently at the three-day meeting of the Sangh Parivar on Saturday, that India should push ahead in the spirit of Seattle and Doha at the Cancun meeting of the WTO, an innocent query from a Swadeshi leader confirmed that the government had put aside its economic reform agenda, at least for now.

The swadeshi leader wanted to know the government's stance on investment-related issues, known as the Singapore issues, to come up at Cancun.

Jaitley said the government could not concede the WTO's proposal of opening up India for untrammelled foreign investment. "Then, how relevant is the NK Singh report?" the questioner persisted.

"That is precisely why the government has decided to defer opening up various sectors to FDI," Jaitley replied, making it absolutely clear that the government is not going to pursue the recommendations of the NK Singh committee report in any comprehensive way.

Finance Minister Jaswant Singh is believed to be of the view that despite erratic results, there are few economies in the world performing as well as the Indian economy, and that India must leverage the current global recession to make the country a more liberal and attractive FDI destination.

The government's policy is at variance with the RSS concept of arth chintan (economic world-view). The RSS feels giving free access to multinationals to the Indian market is liberalisation dressed up as a design to curtain India's sovereignty.

At the meeting, Jaitley argued in favour of continuing to bargain on investment issues at the WTO by saying that the trade balance between India and the US was in favour of India. Indian exports are valued at Rs 60,000 crore (Rs 600 billion) as against the US exports worth Rs 30,000 crore (Rs 300 billion) to India.

But he also emphasised that India would not relent from its position from Doha - a proposition which conforms to the swadeshi faction's thinking.

The two-hour discussion on economic issues, ranging from the WTO to divestment and the FDI, was seemingly low on sound and fury. "We were not there for a verbal duel," said a swadeshi leader.

But although the government manifestly demonstrated it intended to adopt a conciliatory and conformist attitude to the economic policy of the Sangh Parivar, the swadeshi faction within the Parivar and hardline Hindutva leaders did not even try to conceal their "suspicion" of the BJP's real intentions.

Jaitley, who had held the divestment portfolio earlier, also tried to sum up the government's world-view on divestment in 'just three minutes.'

The minister's articulation, however, merely lifted the lid on a new swadeshi argument because the swadeshi faction said it had no conceptual differences on divestment per se, it did have serious doubts on the 'methodology of divestment.'

The government gave a categorical assurance that the labour reforms would be carried out only after taking into account the views of Bharatiya Majdoor Sangh, the RSS-backed trade union.

There was a strong edge of desperation in the BJP camp's arguments which harped on better coordination with various constituents of the Sangh Parivar to put up a united face and galvanise cadres for political mobilization in the Assembly elections in Delhi, Madhya Pradesh, Chhattisgarh and Rajasthan and the general elections due for next year.

In his summing up address, Prime Minister Atal Bihari Vajpayee did try to convey an implicit message to the Parivar, "Our goal is one and we must not distrust each other."

The same message was conveyed by Deputy Prime Minister LK Advani who attended a substantial part of the conclave and addressed a session exclusively to discuss 'national security.'

RSS chief KS Sudershan in his role as "ultimate arbiter" did try to emphasise that all constituents of the Parivar were bound by its core ideology-Hindutva.

But the residual bitterness on Ayodhya between the government and the VHP refused to fade away, sweet talk notwithstanding.

Similarly, BMS founder Dattopant Thengdi demonstrated his alienation from the coordination proposal by refusing to attend the conclave.

At the end the conclave, the swadeshi faction and the VHP have decided to continue with their agitation. But a conciliatory government is ready to put reforms on backburner in order to win over estranged parivar constituents, now more vehemently than ever before.

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