Who paralysed India’s growth?
If the free-market wallahs want economic growth, they should stop giving intellectual cover to crony capitalism.
The writer is a journalist in Delhi whose work has appeared in The Christian Science Monitor and The New York Times. He tweets @DilliDurAst
Until the global recession of 2008, it was impossible in India to criticise the corporate sector. If you dared to ask a question about the conduct of a private company, you’d be branded a jholawallah, who preferred pre-liberalisation India, where it took a year to get a phone connection. See, now, the telecom boom, don’t you want it?
The intellectual blackmail wasn’t limited to economists and experts. There was even a ‘Libertarian Cartel of Indian Bloggers’ (LCIB) a bunch of grown-up men behaving like school bullies, scouring the internet for anyone questioning corporate malpractice, viciously trolling and abusing into silence anyone who didn’t agree that the state is evil and the ‘free’ market is god. Short of supporting Mukesh Ambani as dejure prime minister, they went to any extent to defend crony capitalism and protect big capital from regulatory oversight. The ‘cartel’ in their name was only half in jest, because it is not as if they ever spoke against cartelisation in the Indian marketplace. The LCIB disappeared like a bheegi billi when the 2008 recession happened. I recalled their evangelism last year when the Competition Commission of India fined 11 cement companies INR6,698 crore for cartelisation. There were no loud cheers from the free-market wallahs about the decision. You’d think they’d be screaming with joy about policies that make a free market fair, make it work for consumers and keep it open for new and small entrants. That is what the antitrust legislation does in the United States.
The current crisis in the Indian economy is blamed on “policy paralysis” — the government is too paralysed to take legislative and executive decisions in the direction of economic reforms for the fear that they will politically backfire.
How and why did the government get policy-paralysed? It was a series of scams that left the government with little credibility. The biggest of these relate to allocation of telecom spectrum and coal mining blocks.
In other words, it was corruption that led to the policy paralysis, which has led to an unforeseen slowing down of growth. The Indian government was throwing away precious public resources to corporates for a pittance. You’d think that free-market wallahs would object, they’d ask for better regulation, and demand a strong and independent anti-corruption ombudsman like many countries have. Instead, what are the free-market wallahs saying? They are targeting welfare schemes. They are saying that Sonia Gandhi’s populism got us here. Hain?
The magical public-private partnership (PPP) is supposed to be the magic wand for ‘nation building’ because public sector companies couldn’t do it. Fine. Let’s see PPP in Delhi. 12,587 crores of public money was spent in letting a private company re-do the Delhi airport. Without even going into the financial scams that are alleged here, let us just see the Delhi airport during monsoon rains. It’s flooded. If a public sector company had built an airport with leaking roofs, the free-market wallahs would be crying hoarse, ‘Privatisation! Privatisation!’ What are they saying now? Nothing. The free-market wallahs’ big rallying cry these days is that the government, short of money, shouldn’t be spending a few thousand crore on a food security law that seeks to end starvation deaths and reduce malnutrition. The free-market wallahs never worried about how much money the government lost in killing the public sector Air India so that private airlines could benefit, or in the huge public debt private companies have run away with, or the money the government could have made by auctioning coal, telecom and other sources rather than throwing them away to favourites. The money being spent on food security, by contrast, is a pittance. The free-market wallahs are opposed to it not because of the finances involved or because its delivery would be inefficient, but because they ideologically think it is not the government’s job to feed the starving.
If the free-market wallahs in India want to be taken seriously, and if they really want meaningful economic growth, they need to stop giving intellectual cover to crony capitalism by resorting to the red herring of ’socialist jholawallahs’.
Published in The Express Tribune, August 30th, 2013.
The intellectual blackmail wasn’t limited to economists and experts. There was even a ‘Libertarian Cartel of Indian Bloggers’ (LCIB) a bunch of grown-up men behaving like school bullies, scouring the internet for anyone questioning corporate malpractice, viciously trolling and abusing into silence anyone who didn’t agree that the state is evil and the ‘free’ market is god. Short of supporting Mukesh Ambani as dejure prime minister, they went to any extent to defend crony capitalism and protect big capital from regulatory oversight. The ‘cartel’ in their name was only half in jest, because it is not as if they ever spoke against cartelisation in the Indian marketplace. The LCIB disappeared like a bheegi billi when the 2008 recession happened. I recalled their evangelism last year when the Competition Commission of India fined 11 cement companies INR6,698 crore for cartelisation. There were no loud cheers from the free-market wallahs about the decision. You’d think they’d be screaming with joy about policies that make a free market fair, make it work for consumers and keep it open for new and small entrants. That is what the antitrust legislation does in the United States.
The current crisis in the Indian economy is blamed on “policy paralysis” — the government is too paralysed to take legislative and executive decisions in the direction of economic reforms for the fear that they will politically backfire.
How and why did the government get policy-paralysed? It was a series of scams that left the government with little credibility. The biggest of these relate to allocation of telecom spectrum and coal mining blocks.
In other words, it was corruption that led to the policy paralysis, which has led to an unforeseen slowing down of growth. The Indian government was throwing away precious public resources to corporates for a pittance. You’d think that free-market wallahs would object, they’d ask for better regulation, and demand a strong and independent anti-corruption ombudsman like many countries have. Instead, what are the free-market wallahs saying? They are targeting welfare schemes. They are saying that Sonia Gandhi’s populism got us here. Hain?
The magical public-private partnership (PPP) is supposed to be the magic wand for ‘nation building’ because public sector companies couldn’t do it. Fine. Let’s see PPP in Delhi. 12,587 crores of public money was spent in letting a private company re-do the Delhi airport. Without even going into the financial scams that are alleged here, let us just see the Delhi airport during monsoon rains. It’s flooded. If a public sector company had built an airport with leaking roofs, the free-market wallahs would be crying hoarse, ‘Privatisation! Privatisation!’ What are they saying now? Nothing. The free-market wallahs’ big rallying cry these days is that the government, short of money, shouldn’t be spending a few thousand crore on a food security law that seeks to end starvation deaths and reduce malnutrition. The free-market wallahs never worried about how much money the government lost in killing the public sector Air India so that private airlines could benefit, or in the huge public debt private companies have run away with, or the money the government could have made by auctioning coal, telecom and other sources rather than throwing them away to favourites. The money being spent on food security, by contrast, is a pittance. The free-market wallahs are opposed to it not because of the finances involved or because its delivery would be inefficient, but because they ideologically think it is not the government’s job to feed the starving.
If the free-market wallahs in India want to be taken seriously, and if they really want meaningful economic growth, they need to stop giving intellectual cover to crony capitalism by resorting to the red herring of ’socialist jholawallahs’.
Published in The Express Tribune, August 30th, 2013.