Growth without pain – Sitaram Yechury



It is now United States President Barack Obama’s turn to ‘advise’ (read pressurise) India to go in for big ticket reforms of financial liberalisation. He says that, “The time may be right for another wave of economic reforms”, that “In too many sectors, such as retail, India limits or prohibits foreign investment.” The pressure, thus, is to prise open our economy further for international finance capital to maximise profits at a time when the economies of the advanced countries continue to flounder in the current protracted global recession.

Obama’s comments should not be seen as an ‘one-off’ effort. Earlier, international credit agencies had downgraded ratings hoping to pressurise India to go in for further reforms. In April, Standard & Poor’s, one of the three major global rating agencies, reversed India’s outlook from ‘stable’ to ‘negative’.  Its report titled ‘Will India be the first BRIC fallen angel?’ had the cheek to say, “Paramount political power rests with the leader of the Congress party, Sonia Gandhi, who holds no Cabinet position, while the government is led by an unelected Prime Minister, Manmohan Singh, who lacks a political base of his own”.

Following this report, Fitch Ratings revised India’s outlook from ‘stable’ to ‘negative’ in June. Of the three, only Moody’s retains a ‘stable’ outlook for India. All three agencies have virtually threatened that unless India goes in for further reforms, they will not improve the ratings which continue to be the yardstick for the flow of foreign  investments into India.

There are strong suspicions that these agencies promote the agenda of international finance capital by manipulating their ratings. They had earlier given AAA rating to mortgage-based debt of companies like Enron. In 2008, on the eve of the global financial meltdown, they had given a similar rating to Lehman Brothers and the insurance giant AIG — the main players in the Wall Street collapse.

Another instance, in line with such pressures on India, is the July 16 issue of Time magazine, which had our prime minister on the cover, describing him as “The underachiever”. It says, “India needs a reboot. Is Prime Minister Manmohan Singh up to the job?” It goes on, “India is stalling. To turn it around, Prime Minister Manmohan Singh must emerge from his private and political gloom”. It urges India to go for a host of bold reforms.

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