| Economic crisis: experts insist on tighter norms | |
| BS Reporter / Chennai/ Dharwad December 2, 2008, 0:25 IST | |
Thanks to strong regulatory mechanisms and restrictive measures in the policies pursued in India, the intensity of the economic slowdown is not to the extent of that in developed countries, said noted economist professor S T Bagalkoti.
Speaking at the seminar on ‘Global Economic Crisis and India’ organised by NGO People for India Forum at Karnataka Vidyavardhaka Sangha here on Sunday he said the public sector banks and the public sector insurance sector could minimise the damage. Stating that reliance on domestic savings had saved the countries from the damage while those who have depended on the foreign capital and relied heavily on that have been facing crisis.
“To ward off this crisis job cuts are being proposed. The sudden withdrawal by FIIs has created a crash in the share market. These FIIs are going out to cover the losses in the mother countries. That’s the reason the FIIs and FDIs should be regulated” he said.
“People do matter and hence the welfare of the people should be the uppermost agenda. Free market economy will not deliver. Regulations and restrictive measures are a must. Government should intervene in the economic activities. Public sector ownership and permanent employment should increase” he asserted.
Renowned economist professor N G Chachadi asserted that it was the result of failure of the neo-liberal system, which gave a free hand to the market without any regulations and restrictions.
“The epicenter of the present economic earth quake is USA. Because of the desire to make more and more profit, the financial system there, which was in full control of the private sector, went on lending even to those who had no capacity to repay” he said.
President of the Insurance Employees’ Union, Raghavendra Ayi said the proposed further reforms would be a death blow to the country’s economic sovereignty.
He attacked the reforms process and highlighted the ill-effects of the policies being pursued by the successive governments in the name of reforms. He said that the reforms proposed in the banking sector would seek to weaken the Indian control on the banks.
The proposed reforms in the insurance sector like increasing the FDI from present 26 per cent to 49 per cent and increase in the capital of LIC from present Rs 5 crore to Rs 100 crore is not at all in the interest of either the country or the people. Increase in FDI would mean more and more savings of the Indian people going out.
Presiding over the seminar president of People for India Forum professor K Raghavendra Rao remarked that in a liberal democracy there are two avenues to ward off the crisis: Elections and people’s struggle. “It is only through peoples’ action that the crisis can be warded off” he asserted.
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