Economy: India Loosing Focus

Denunciation of S&P’s warning to lower investment rating expected better reaction than those from Moily orAshwani Kumar.No amount of solaces through press statement or articles in media from the government’s own economists, be it Rangarajan or Kaushik Basu but visible actions can improve the poor perception. S&P is not the lone talking the slowdown. The views of Moody, OECD, and HSBC are also on the same line. Eurozone crisis might have affected but it is not the cause of the downfall or blurring of the India story. Manmohan Singh who gets so much importance from Obama for his advice as reported in media would have chalked the clear short term and long term roadmap for the government to follow and monitored the same to avoid a repeat. With Congress assuring his job till 2014 election, his response must be more forthright, positive and different to prove all his detractors and opposition wrong.

Sonia and her team was busy sorting out the way to overcome the hurdle created by Mamta-Mulayam duo in getting the party’s presidential candidate to reach Raisina Hill. Manmohan who started well with announcement of the intention of overseeing speedy implementation of all high value infrastructure projects would have focused on some more actions.

Manmohan would have at least selected to get GST and land acquisition bill on fast track through a steely determination as showed at the time of getting Nuclear Bill through. The two bills would have changed the perception of the domestic as well as foreign investors in India story. If Manmhoan could talk about getting the presidential candidate accepted by the opposition leaders, he could have certainly worked some overtime on just two important tasks. It would have been a visible seriousness of the government for reform. If Sonia can talk or meet with Mulayam, why can’t Manmohan do with Yaswant Sinha or Advani?

Unfortunately, the recent government actions such as increasing MSP of grains or holding up the decision on diesel prices has not signaled its inclination towards tough decision for improving the economy. The situation can only aggravate the bad situation to worse with prospect of monsoon deficit.

Manmohan would have focused on the governance task in New Delhi and made the administration work. Manmohan’s promise of monitoring of infrastructure projects too is halfhearted. Many feel bad when an economist prime minister has not realized that with electricity how a nation can become a super power. With effective implementation and restructuring of governance, Manmohan would have focused on overcoming the capacity shortage of water, electricity, road, broadband, air transport and port. Manmohan could even now reorganize his cabinet and put together all infrastructure activities under one of the senior most ministers. However, Manmohan Singh as usual preferred instead to participate in the Group of 20 (G-20) developing nations’ meet in Mexico and the Earth Summit in Brazil next week.

Interestingly, Kapil Sibal, Montek Singh Ahluwalia, Ghulam Nabi Azad, foreign secretary Ranjan Mathai and ambassador Nirupama Rao with Sam Pitroda were in Washington pleading India’s case. Surprisingly, I hardly found any significant coverage of the talks, or of India, in the US media.

I wish after ensuring the easy passage for Pranab, Sonia focuses on changing the poor perception about the India story through the appointment of a right Finance minister to replace Pranab, who can undo some of the damaging decisions of the government that has made the India Inc suspicious about the government’s intention.Indecision is costly, but wrong decision are damaging.

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