The Associated Chambers of Commerce & Industry has, in a rare blast of criticism, said that the government lacks political will to resolve pressing economic issues.

The three key issues cited by the chamber relate to the need for an oil price hike, a stricter intellectual property rights regime and phasing out of quantitative restrictions on imports. The chamber feels that coalition politics has come to stay, but the "inertia" that has come with it in decision-making has to go.

This is absolutely true. The Inder Kumar Gujral-led government is guilty, albeit not entirely due to its own fault, of the worst epoch of policy paralysis since reform began. But the good news has come from the stock market.

When markets ignore a crack down the middle in the ruling party, it at least reflects a shift in importance of power politics. On the other hand, the market reacted positively to a pathbreaking budget, indicating that relevant policy-making would still evoke strong response. The writing is on the wall for politicians.

In open statements, such as the one made by Assocham yesterday, or through obvious market indicators such as the behaviour of the sensitive index, they are being told to make relevant policy or shut up. At the enterprise level, Indian organisations have shown remarkable maturity in reacting to reform. But the enterprise must be given a macroeconomic environment to prosper in.

The important development across the economic spectrum is that the traditional naive belief, that the government is benevolent and acts in the best interests of its people, is collapsing.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.