Thursday, 4 October 2012

Selling the family silver or legitimate reforms?

With Pranab-da out of the picture, cooling his heals in the Rashtrapati Bhawan. The Manmohan Singh government seems to have got going full swing on the neo-liberal reform agenda. I have no views on many of these issues yet. But I sure want to study all of these issues and write about them. Here is a list of what has been doing rounds in the news about economic ‘reforms’ that have been announced or are likely to be announced.
1)      Sale of land holdings to generate cash, Kelkar committee recommendation.
2)      Reversal of Tax liability for Vodafone or settling for less tax than is due at a time when Vodafone has been criticized in UK for tax avoidance in that country.
3)      Multibrand retail FDI (I have written innumerable posts on it. But I am going to write more. I expect this change to be challenged in parliament and outside in months to come.)
4)      49% FDI in insurance and pension announced on 4-Oct.
5)      Allowing pension funds including EPFO to invest is equity markets
6)      Reducing subsidies (LPG, Diesel, Food, Fertilizers), Kelkar committee recommendation
7)      49% FDI in Aviation
8)      Land acquisition bill(Big Business wants easy access to farm land)
9)      Changes in labor laws(Businesses feel the labour laws are archaic. Modern labour laws should allow easy separation with employee or hire & fire for short)

The list goes on, since there are more announcements to come before the government falls. Meanwhile the silly market keeps going up in expectation that the reforms will stick. It is funny the stock market does not quite get how democracy works. Political management can only go so far when it comes to keeping a minority government in power. Chidambaram feels minority governments can push reform. PM Manmohan Singh feels that elections are far. Meanwhile Mamata Banerjee gets angrier by the day. Let’s see what is the ‘Lakshman Rekha’ for SP and BSP. Pranab-da made better judgment after all, he will stay in the Presidential Palace full term and his name will go down in history without a blemish, but the Manmohan Singh government is on a much shaky wicket.  

‘If we have to go down, we will go down fighting.’ – Manmohan Singh
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