NEW DELHI, February 11: "Computer chips, yes; potato chips, no", when the swadeshi hardliner and former BJP president Murali Manohar Joshi coined this slogan seven years ago he was almost a lone crusader against globalisation. Now that Joshi's stand is widely accepted within the party and from the proponents of globalisation in the Congress to the United Front, the chants of various shades of swadeshi have become the official norm. The physicist from Allahabad, who defied political ostracism of his party to woo even the Communists and others to work out a parliamentary consensus on World Trade Organisation (WTO) through his Forum of Parliamentarians on Intellectual Property Rights was instrumental in blocking three important bills- Patents, Trade Mark and finally Insurance- by mobilising opinion in Parliament.Now, with even the apex industry organisations veering round to the swadeshi line, Joshi feels that his stand has been vindicated. Joshi, fighting for the Lok Sabha from Allahabad, spoke exclusivelyto The Financial Express on the likely priorities before the next government which, he was confident, would be formed by the BJP and allies.
"The 18 months of political instability have ruined the country. The stagnation on the industrial front and the galloping prices on the consumer side exemplify the fact. This has its root in the steep fall in rupee, which had fallen to a record low in recent months", says Joshi. "The BJP's priority", he says, "is to restore vibrancy on the industrial front through a series of measures like larger public spending in the social and infrastructure sector coupled with modernisation of the farm sector".
Almost 60 per cent of the budgetary allocation should go to the agriculture and social sector, he feels. Joshi objects to two of the WTO agreements India has signed to make all trade in equipment informatics duty free in three years and the new Geneva accord to globalise financial services.
Though he does not want the FIIs to be allowed to play havoc with the domesticeconomy, he does not support the view expressed in certain quarters that there had to be some lock-in period for their investments. Such measures are not needed, he says.
"If the US laws can prevail even when they are inconsistent with the WTO laws we have also to uphold the sovereign rights of Parliament to prevail to deliberate and decide upon the major policy issues", he argues. Joshi is confident that the measures that BJP is planning to take to protect the domestic industry and also to revive the small-scale sector will create an atmosphere for industrial take off. Criticising the UF government for flaunting the inflation rate of 4 percent, lending rate of 13.5 per cent and foreign exchange reserve of $30 billion as indicators of encouraging economic profile, Joshi says, "all the projections made by Chidambaram have gone wrong".
Often a low rate of inflation is either statistical jugglery or the result of recessionary trends. The lending rates are not actually as low as he (Chidambaram) projects. Theofficial lending rates were always around 13 to 14 per ent and the actual lending rates still higher. The banks are flush with funds because of the dearth of credit worthy borrowers not because of successful mobilisation of deposits. Stressing the urgent need for financial sector reforms Joshi feels that opening up of the insurance sector to the domestic sector will generate substantial resources for funding of infrastructure projects. Political instability and low industrial activity have made investors cautious and wary of taking investment initiatives.
This is further illustrated by the slump in the capital goods market. The infrastructure sector has suffered the worst. Stagnation in the telecommunication sector continued all through these months. Not much investment could be attracted into the power, telecommunication and road sectors because there was no internal liberalisation to begin with.
The fluctuation of the exchange rate of rupee has some dire warnings for India, he opines. Since much of ourexports are import-driven the country will be compelled to resort to more expensive imports. Costly imports for the sake of exports are likely to turn out more expensive. As for foreign exchange reserves a good deal of it is made out of borrowings.
Foreign exchange dominated NRI deposits which are normally considered liabilities worldwide are shown as assets by Chidambaram, he says. So is the foreign exchange garnered through IMF borrowings. Complaining that the BJP, if it formed the government, will be inheriting a very poor treasury and a shabby economy Joshi says, the current year's budget had estimated a 12 per cent growth in exports, a 10 per cent increase in imports and a $7billion rise in foreign exchange reserves. But current indications are that export have remained at five per cent, imports at 10 per cent and foreign exchange reserve are at $3.5 billion.
Industrial growth rate has been less than five per cent in the first half of the year against 11.2 per cent in the corresponding period lastyear, he complains. The biggest setback, he says is in the agriculture sector. A comprehensive insurance scheme for farm products is the only way out of the crisis he points out promising that the BJP government will take measures in this direction.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
