NEW DELHI: Former Prime Minister P V Narasimha Rao has expressed concern that the succeeding governments had hijacked and distorted the economic reforms triggered during his tenure and feared that “the nation’s agenda is in danger of being completely diverted away from the development face to the defence face.”
“The country seems to be in for a big change in its mainstream activity. I hope I shall be proved wrong, for the country’s future,” he said in response to a campaign being carried out by former Gujarat Finance Minister and former Congress MP Sanat Mehta for some appropriate action to provide a “human face” to liberalization.
Mehta had circulated compilation of the World Bank Report, the 1999 HRD Report of UNDP and the India HRD Report by Abusalah Shariff to leaders of political parties, Union Ministers, Chief Ministers and intellectuals citing these reports as an endorsement of his view that “reforms without human face will ruin us.”
Narasimha Rao wrote back to him, saying, “it is rather ironic that until we in India hear from sources abroad, our intellectuals and those in government do not seem to realize anything. He rued: “Ordinary people like you and me may shout from the housetops, try to tailor our programmes with precisely the same parameters in view, but we are never even understood by anyone, including our own partymen.”
Quantification of the poverty in the international reports does not interest Narasimha Rao as he says it is “a bit superfluous to know how much exactly poor we are.” What matters him more is to think “how we can mould a fair part of the new agenda to the eradication of poverty, since we know we are poor, and also that changes like liberalization and globalisation are here to stay.”
Massive problems that India face require massive macro solutions, “but with a full insight from field workers like us into the detailed methodologies that suit the grass roots levels,” Narasimha Rao said.
He affirmed that his government had tailored the liberalization programme in 1991 entirely in line with Mahatma Gandhi’s “Talisma” that “when you wish to know if anything you want to do is good or not, imagine the face of the poorest man in the land and ask yourself whether your proposed act will be of any gain to him.”
“The succeeding governments claim to be continuing the same policy, but in fact do not even try to know what was done and why. Every good policy is hijacked into the channels of the elite and made to subserve their interests. And, shown as their own programme, cent per cent,” Narasimha Rao stated.
As an instance, he cites the Vajpayee Government’s overdrive for an outright sale of the Public Sector Undertakings (PSUs) and pleads that this should be distinguished from the proposal of PSU disinvestments considered during his tenure from 1991 to 1996. Narasimha Rao has elaborated this in one of the lectures he delivered on “liberalization and the public sector.”
The sale of PSUs clearly amounts to giving up the accepted policy of mixed economy. Narasimha Rao regrets “to see no effective public reaction at the impending destruction of the entire edifice of the nation’s 50-year old policy, without so much as a serious scrutiny or a nationwide debate.”
While warning that anticipated complications of the PSUs’ sale were “mind-boggling”, Narasimha Rao says “nothing is known about the urgency for the decision or the alternative use to which the sale proceeds are intended to be appropriated.” If the proceeds were to ease the admittedly uncomfortable budgetary position, “the decision would be tantamount to selling one’s dwelling house to pay the grocer’s bill as the illogic is patent,” says the former Premier.
The total assets of the PSUs are approximately Rs 200,000 crores and yet they are just able to fulfill the country’s needs only to the extent of 30 to 35 per cent. Purchase of these huge undertakings would engross the buyers in sorting out the multifarious problems thrown up by the purchases for the next several years, Narasimha Rao points out.
Maybe, the units will be run somewhat more efficiently and may even receive marginal expansion, but it would be impossible for them, in the short run, to make any appreciable dent on the 65 per cent of the unmet needs of the country. “If this is the prospect for several years, one wonders what net gain can be expected today from these unadmitted distress sales.”
Narasimha Rao says any decision to sell off is completely irrevocable as no future government will be in a position to reverse it. For instance, he cites how India was able to bring back the nation’s mortgaged gold in 1991. “Had it been outright sale instead of a mortgage, we could not have done anything about it.
He points out how leasing of the Indian airports for a longish period “could put our interests, especially security interests, at serious risk.” He reminds that India could retain the Kashmir valley in 1947 against the raiders by the one single feat of taking control of the Srinagar Airport just in time.
“After my personal observation and experience over the decades, I am compelled to say that India’s geo-political situation will never never allow any act that loses, or parts with, the control of our airports at any time. It is difficult to imagine the position of a person who lives in his house but allows someone else to control its ingress and egress points. Anyone with his eyes and ears open and his sense of history intact, can feel in his bones, what security implications India is destined or condemned to live with every moment of her existence as a Nation. Either one feels it, or one doesn’t. There is no need to elaborate,” Narasimha Rao states.
He also dubbed as “most unfortunate” that the Government was thinking of selling off Air India and Indian Airlines. “I simply cannot think of India selling off her national carrier, which carries the national flag.”
Explaining the foreign investments that were opened up under his liberalisation policy only to relieve the government of its massive commitments on large infrastructure projects such as power, fertilizer and highways, Narasimha Rao said the purpose was to enable government to utilize more of its own resources on education, health and social assistance.
“The new thinking of 1991 did not fly in the face of our mixed economy. Government simply altered the mix as required by circumstances. It now seems that this policy outline is definitely being tampered with and is about to be destroyed,” adds Narasimha Rao.
The compilation of the World Bank, UNDP and other reports by Sanat Mehta in the form of a booklet that prompted Narasimha Rao to react graphically describes the effects of globalisation in some countries that had made remarkable progress in the last two decades like
n economic insecurity,
n education and health budgets coming under strain,
n longer time needed for human recovery than economic recovery
n job and income security
n cultural insecurity
n personal insecurity
n illicit trade – drugs, women, weapons, and
n political and community insecurity.
Narasimha Rao says scenario painted in the compilation would make a really depressing reading to anyone witnessing it for the first time, but all these effects “were anticipated for a long time in the past in India and particularly in the context of our liberalization policy in 1991.” He says the World Bank, in very plain language, seems to have retracted its earlier assertions at last to recognize the woes of the world’s downtrodden people and thus admitted after over 50 years that many of its past policies were misguided.
The former Prime Minister wants to remind “those who chose to forget or ignore, for whatever reason” the fact that trebling of the allocation for rural development in the Eighth Five-Year Plan and special nationwide “Yojanas” introduced by him and late Rajiv Gandhi were meant “to shore up a poor country’s flanks from some of the anticipated negative effects of liberalization” belatedly being highlighted in the international reports.
“This was not meant to be confined to one Plan. It was the precursor of a new strategy to be repeated on an increasing scale in subsequent Plans. It was a timely and deliberate intensification in the objectives of the planning process,” Narasimha Rao underlined.
He points out how three versions of the Ninth Plan had emerged in the past two years because of change of governments and the latest one cleared by the Union Cabinet in January 1999 is still not operative even after 14 months just because it has not been taken to the National Development Council (NDC) for its approval. “We do not call it a Plan holiday, presumably because it is not considered polite to say so,” Narasimha Rao says, while pointing out that three years out of the Ninth Five-Year Plan have elapsed and no one predict the rest of the Plan.
Narasimha Rao regrets that the targets fixed earlier had since been scaled down on the excuse of bringing them in line with the “ground realities.” He says: “There was a time when targets were deliberately put a bit higher for spurring extra effort. They did draw some flak in the end. Now a much more convenient methodology seems to have been discovered, viz. to begin with low targets and declare that they have been achieved. For the rest, your guess is as good as mine.” END