Opposition claims reforms an eyewash

Are reforms an eyewash or genuine step to break policy paralysis?

While United Progressive Alliance (UPA) ally Trinamool Congress (TMC) has already declared war against foreign direct investment in retail and diesel price hike alleging this, Opposition too are on the same footing.

“It was always a ploy to divert attention from the series of scams that was troubling the UPA government. Reforms can never give result unless strongly supported by good governance, which Manmohan Singh government does not have,” Ravi Shankar Prasad, Deputy leader of opposition in Rajya Sabha and BJP’s chief national spokesman, told Business Standard.

He alleged that while the country’s infrastructural sector is in a serious paralysis, UPA’s corruption saga is continuing. Even senior BJP stalwart L K Advani termed it as “a desperate bid to shift the focus of debate from corruption” in his blog.

On the other hand, the Left parties are planning to observe September 20 as national protest day. “This is not an eyewash by the Centre, but policy stance in favour of foreign players, which has BJP backing. When multi-nationals like Walmart enter the Indian market, they will manipulate prices which will affect small retailers in the long run,” said Brinda Karat, CPM politburo member.

According to Left, it is a failure from the part of Manmohan Singh government that they cannot rescue farmers from suicide, but are expecting multi-nationals to do that.

However, economists believe that though this may be a political ploy, the measures will turn out to be positive in the long run. “It may be an eyewash. But if you take it economically, though it may hurt direct sellers and small sellers initially, in the long run retail FDI is going to be good. Prices will go up for sure, while it may be a gain for net sellers in rural market, net buyers are going to suffer initially,” said Abhirup Sarkar, a senior economist and a professor of ISI Calcutta.

Opposition parties had disrupted the Parliament functioning for several days, demanding the resignation of Prime Minister over the issue of allocation of coal blocks. In what appeared as an effort to divert attention, last Thursday, the Centre had capped subsidised LPG for a consumer to six per year, while diesel price was increased to Rs 5 per litre. It was followed up by clearing 51% FDI in retail and 49% each in aviation and power on Friday.

Defending the decision, Congress MP Adhir Ranjan Chowdhury said, “These reforms in economic sector was long overdue, since 1997, and nothing which was introduced abruptly. If the BJP and the TMC are thinking that we have diverted their attention, then it is their political failure and a victory of the Congress.”