Obama said it

But UPA already knows it: on the economy,it continues to hold back on its promises

Written by The Indian Express | Published: July 17, 2012 1:17 am

But UPA already knows it: on the economy,it continues to hold back on its promises

The sheen of US-China economic relations has often been seen to dim when US presidents have leaned on China to relax exchange controls on the renminbi without acknowledging a concomitant need to keep fiscal discipline back home. As the subcontinent becomes an important economic partner for Washington — and with the US president well into campaign mode — a similar narrative would seem to be tinging US-India relations. Barack Obama’s lecture on India’s deteriorating investment climate may be countered by asking him to turn his attention to the anti-outsourcing walls his own administration is raising for US companies as well as the delay in signing mutual social welfare rules. Both lead to a similar deceleration in investment. Having said that,however,Obama has said nothing the UPA government is not painfully familiar with. Instead of rushing to join issue with the US president,therefore,UPA seniors would do well to look again at what their own government has been promising to deliver,and failing to. Anyone who has followed the PMO’s tweets in the last 20 days,for instance,is sure to find an ambitious — and unfulfilled — agenda: from his plans to turn around the balance of payments by cutting the current account deficit,revive investor sentiment and encourage investment into mutual funds and insurance,to the proposed setting up of a national urban health mission.

Those tweeted plans are likely to come unstuck against the same road blocks in party and government that have stalled reform so far. To take just one illustration of the unbroken standstill: at the end of this year’s budget session,101 bills are pending in the two Houses. Of the total of 187 hours that the Lok Sabha worked,it spent less than 11 per cent in passing bills. This is one reason why big-ticket investment is drying up and the $1 trillion infrastructure spending target now seems increasingly remote.

Instead of moving towards reform,the Indian government seems to be putting up obstacles for investors in the telecom,metals,automobile and IT sectors,and it has slammed shut the doors of the financial sector on them by making credit costly. From a position where the US,UK,Russia and France came to scout for Indian investments in 2010,to a position where Singapore issues a demarche to India on its black money report — India has come a long way. Obama doesn’t have to rub it in,but surely the UPA protests too much.

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