A new aam aadmi

The prime minister's address to the nation, urging the people to say yes to hard economic decisions rather than go for soft options, couldn't have been more candid and direct. Of course, the home truths Manmohan Singh spoke could have been timed better, maybe last November itself, when diesel price correction was overdue and the policy on FDI in big retail was announced and then withdrawn. The Uttar Pradesh elections, which came a few months later, were cited as reason for the deferment of all politically contentious decisions. In retrospect, the Congress's performance in the UP elections would not have been worse than it was if some of these hard decisions had been taken in late 2011 itself.

Our political class often misreads the possible response of the aam aadmi to economic reforms which obviously have the potential to create new gainers and losers. History tells us it is only in a highly state-led, dirigiste economic system that the gainers and losers remain largely static. We have opted for a more dynamic system. Just look at the utter confusion, deliberate or otherwise, among various political parties about who will be the new losers and who the new gainers from FDI in big retail. This debate, by itself, is healthy.

Many BJP leaders and Lohiaites like Nitish Kumar and Sharad Yadav seem convinced that it will destroy the local economy. However, there are sections of the Akali Dal which say that FDI in retail will help farmers. Within the Congress, some leaders, especially from Kerala, have doubts about the economic and social outcome of FDI in retail.

Prime Minister Manmohan Singh, therefore, was very emphatic in his speech that people must not be misled by those who are spreading confusion about the real impact of such reforms. "Please do not be misled by those who want to confuse you by spreading fear and false information. The same tactics were adopted in 1991. They did not succeed then. They will not succeed now. I have full faith in the wisdom of the people of India," he said.

... contd.

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