Economic Times ⁽²¹⁸⁾

The calls for very large duties on imports by Prakash Singh Badal, the chief minister of Punjab, are misplaced Economic Times, June 21 2000 “Imported dairy products flood Punjab's market, sounding the death-knell for marginal farmers,” says the headline of an article published in a recent issue of Outlook. Thanks to the “glut of imported butter oil and milk powder,” continues the article, Punjab has been turned from “the proverbial land of milk and honey” into “the land of milk, more milk and tears.” The magazine’s claim is, of course, disingenuous. The phenomenal success of the dairy industry under the charismatic leadership of Dr. Verghese Kurien has culminated in India becoming the world’s largest producer of milk today. One wonders how just 40,000 tonnes of imports, which is all the milk that has been imported according to Outlook’s own account, could lead to a glut in a country that produces 75 million tonnes of its own milk every year. To be sure, dairy farmers in Punjab and elsewhere are under stress; prices of milk and milk products have experienced a…

While Prime Minister Vajpayee and Sinha must fight their own battle with the Swadeshi Jagran Manch, the gratuitous attack by the critics on the left is altogether a different matter. Economic Times, May 24, 2000 Finance Minister Yashwant Sinha has recently said that the consensus in favour of reforms is breaking down. Coming from the general leading the charge for reforms, these are ominous words. In trying to understand Sinha’s plight, one suspects that he is reacting to simultaneous attacks from two extreme sources which, though otherwise diametrically opposed to each other, have one thing in common: hostility to economic reforms. Thus, from the right, the “swadeshi” constituency within the BJP is asserting itself, pulling the government away from its agenda. And from the left, armed with some new evidence of dubious quality showing that poverty has stopped declining since the beginning of the reforms in 1991, the traditional critics of growth-oriented reforms are striking back. While Prime Minister Vajpayee and Sinha must fight their own battle with the Swadeshi Jagran Manch, the gratuitous attack by the critics on the…

The Meltzer Commission has harsh words for the manner in which the World Bank has served the poor in developing countries in recent years. Economic Times, April 26, 2000 “At the entrance to the World Bank's headquarters in Washington, a large sign reads: ‘Our dream is a world without poverty.’… Unfortunately, neither the World Bank nor the regional development banks are moving rapidly toward that objective.” Thus begins the indictment of the World Bank by the International Financial Institution Advisory Commission, chaired by the distinguished economist Allan Meltzer of the Carnegie Mellon University and including, as a member, the eminent Harvard economist Jeffrey Sachs. Appointed by the U.S. Congress in November 1998, the Meltzer Commission was asked to consider the future roles of the International Monetary Fund (IMF), World Bank and regional development banks, which include the Asian Development Bank (ADB), African Development Bank (AfDB) and Inter-American Development Bank (IDB). Last month, the Commission came out with its report, recommending sweeping changes. Though the Commission’s recommendations are not binding, they offer much food for thought to those interested in the…

In spite of the public confidence he enjoyed, or perhaps because of it, Pundit Nehru used every opportunity available to him to explain to the lay public and intellectuals alike the rationale behind the big economic initiatives he had been undertaking or planning to undertake. Economic Times, March 29, 2000 When Lally Weymouth of the Washington Post asked Prime Minister Vajpayee during a recent interview how he would like to change India and what he wants to be his legacy, Mr. Vajpayee was unequivocal in his reply, “I would like India to become a developed country as early as possible.” This answer would, no doubt, be music to the ears of all Indians, especially the younger generation, which aspires to avoid the economic fate suffered by its predecessor generations. And if we go by the economic-reforms agenda that Mr. Vajpayee has been unfolding, we can scarcely doubt his sincerity and commitment to the goal of turning India into a developed country one day. Nevertheless, the glacial pace with which Mr. Vajpayee and Mr. Sinha have been moving is unsettling. Not only the…

India's tariff liberalization has come to a virtual halt. It is time to resume it in the 2000 budget. Economic Times, February 23, 2000 Slowly but surely, Prime Minister Vajpayee and Finance Minister Sinha are laying to rest the doubts about their resolve to implement economic reforms. After returning to power, their first major victory came when they successfully challenged the truckers’ strike and raised the price of diesel oil. Soon after, they confronted head on a strike by insurance workers and enacted the insurance bill, thus, opening the sector to increased competition from domestic as well as foreign sources. Most recently, they have begun to move decisively on the privatisation front. In what can be termed as the first true privatisation, the government have transferred 74 percent of their stake in Modern Foods into private hands, principally the Hindustan Lever. Even the Indian Airlines is now up for sale. Though genuine concerns remain with respect to the manner in which this privatisation is to proceed, the mere fact that the government is willing to transfer 51% of its stake…