Honouring the word

The BJP government's decision to go along with the United Front government's wheat imports programme should come as a great relief to those ...

The BJP government8217;s decision to go along with the United Front government8217;s wheat imports programme should come as a great relief to those who feared that the new government would open up each deal entered into by its predecessor. Not necessarily because there was definite proof of corruption, but just because there were allegations of wrong-doing.

That was the surest recipe for ensuring that the economy came to a grinding halt as project after project got stalled. And who should know that better than the BJP which saw precisely this happen when, at the instance of misguided souls within the Sangh Parivar, it scrapped, and later re-negotiated, the Enron power project in Maharashtra just a couple of years ago. In this particular case, no allegation of corruption was finally proved and the BJP had to suffer the ignominy of eating its words, and finding all manner of silly excuses to justify its earlier actions. What is perhaps even more gratifying is that the final stamp of approval to the decision to import1.5 million tonnes of wheat from Australia should come from Food Minister Surjit Singh Barnala.

After reviewing all aspects of the deal, Barnala has said that it had been finalised by the Gujral government as it was in the interest of the country. More so, in view of the fact that there is likely to be a shortfall of four million tonnes in this year8217;s wheat production. Barnala hails from prosperous Punjab, whose farmers and politicians have traditionally been at the forefront against imports of what they believe is expensive wheat. On several occasions in the past, for example, they have demanded that procurement prices be raised to equal the landed price of imported wheat.

The landed cost of the Australian wheat is likely to be in the region of Rs 740 per quintal, as against the current procurement price of Rs 455. The Akalis have been pressurising the government to agree to hike this to a stupendous Rs 600.

Linking procurement prices to imported ones, though it may appeal to the swadeshi lobby is, ofcourse, particularly bad economics. For while the higher import prices apply only to a small amount of grain in this particular case, just to 1.5 million tonnes a general hike in procurement prices means higher prices for all purchases. The BJP government must ensure that the Akali stamp of approval to the wheat import does not lead to a situation in which the Akalis make out a case for hiking the wheat procurement prices to unsustainable levels. The Cabinet, in fact, debated this very issue in its first meeting, and finally put off a decision.

In other words, Prime Minister Atal Behari Vajpayee found it difficult to convince his allies that hiking procurement prices to Rs 600 per quintal would further bankrupt the treasury. But, that apart, it is desirable that the BJP continue with this pragmatic policy of ratifying decisions taken by previous governments, unless there are very good reasons for not doing so.

The economy is in too critical a state to afford the luxury of a government continuing toplay politics.