, by DR. S. AUSAF SAIED VASFI
By the time these lines appear in print, the ever-rising inflation curve might have further jacked up from 11.05 per cent, the figure indicating the economic health of the nation as on June 5.
The inflation, which has made a big hole in the pocket of Aam Aadmi – middle and lower income groups – is making life miserable for hundreds of millions.
The root-cause is International Monetary Fund’s policies, World Bank ethics and popularity of games of chances like today’s cricket, interest-oriented economy, abundance of money supply and absence of charity culture in the nation.
Meagre savings and meagrer deposits are being drained out by the black hole. It is adversely affecting growth. Hike in interest rates by the Reserve Bank of India is a serious problem for those who had taken home-loans a few days ago on lower rates of interest.
As the press reports say in so many words: The price rise has moved beyond commodities and fine decimal points – it’s now affecting goods on shop shelves. Items of daily use like soaps, shampoos, biscuits, detergents and other fast-moving consumer goods have become costlier by 10-30 per cent in the last three months. That’s not all: There is further pain ahead with an additional 10 per cent price increase being talked about by companies in the next couple of months. Higher price levels, say these companies, are likely to rule at least till the end of the year.
As being suggested that the commercial advertisements that fuel hike are the chief culprits, is not the total truth. It was a lack of imagination and vision on the part of the Government, which failed to foresee the on-coming economic depression. Inflation is not a sudden phenomenon. It happens when the state fails to see the demand and supply imbalance. When the Government opened the doors to foreign investment, it failed to anticipate the consequences of abundant money supply. Agriculture and food production received only marginal, casual attention.
The Economist of June 7 raises a pertinent question: Japan’s inflation was 0.8 per cent, China 8.5 per cent, Malaysia 3 per cent, Britain 3 per cent, Canada 1.7 per cent, France 3 per cent, Germany 3 per cent and Italy 3.6 per cent. If these countries have been able to control inflation, why has India failed?
In the name of free trade, to quote a June 21 editorial in the Asian Age: The Government has refused to ban forward trading on all essential commodities. Its Left allies have been demanding a ban on forward trading in 25 commodities. The Government could have tried this for six months, but it refused for reasons known only to itself.
As far as the nuclear agreement with the United States is concerned, its salient feature happens to be Prime Minister Manmohan Singh’s anxiety for its non-acceptance by the Left.
It appears as if it is a life and death question for the custodian of national interests. Considering themselves more loyal than the proverbial king, the Communists think veto is their moral right if the Congress refused to part with the pound of flesh. What they forget is: the UPA Government is Congress-led, not the Left-led. The Leftists are not only against the nuclear deal but the very engagement with the US. This dictation in foreign policy affairs sends out wrong signals. What the Communists fail to understand is that political crutches are available in electoral market. It is not for nothing that the DMK, RJD and NCP have expressed their willingness to back the Prime Minister.
The Left maliciously floated a story that Indian Muslims are against the nuclear deal. That the principal minority has its own views on the godfather of Israel is true. True is also the fact that Muslims have their own opinion on the destroyer of Afghanistan. So is the case with Iraq and the sustained US campaign against Islam in the name of fighting terrorism. But like all normal citizens in a plural democracy, some Muslims are pro-nuclear while some are against it. And there are many who have no opinion at all. The community as such or any significant Muslim organisation has not adopted any resolution to that effect. They however wish and pray they gain weight enough to affect national policies.
Besides several politicians, some eminent scientists too have expressed reservation on the said agreement. The dissenting scientists and the points they have raised deserve notice, particularly those pertaining to “extreme secrecy” and “parochial interests.”
“A combination of extreme secrecy, media hype, parochial interests of organisations and ignorance of the issues among the general public have put the country on a dangerous path,” said former Atomic Energy Regulatory Board chairman, A. Gopalakrishnan; former Atomic Energy Commission chief P.K. Iyengar; and former Bhabha Atomic Research Centre director, A.N. Prasad, in a joint release last week. They pointed out that there was a great deal of disquiet in the scientific community over the government’s intention to approach the IAEA without giving details about the proposed safeguards agreement even to the UPA-Left committee that was created specifically for a joint evaluation of the deal.
Besides, the Hyde Act and 123 Agreement do not guarantee uninterrupted fuel supplies for reactors, which India would place under safeguards. Though the government had assured that this defect would be corrected in the safeguards agreement, the IAEA was not a fuel-supply guarantor. Therefore, there was serious doubt whether the Indian negotiators had obtained any assurance in this regard, they said.
The points necessitate clarification and remedial steps before rushing for the photo-session.
Coming back to the local political scene, credibility has never been the strong point of the BSP supremo. Maya Memsaheb could not bring down the government by withdrawing support. The reasons for the step cited by her are too weak to stand scrutiny. One of them is inflation. The other is weaning away the Dalits. There is no evidence to support her claim. The truth is different: The Central Government has kept the Taj Corridor and allied cases alive, including the one dealing with her disproportionate assets. These cases have been giving her sleeping nights.
US POLICIES TO BLAME
Washington and London – solely responsible for the new world disorder – have been striving to impress upon their constituencies that oil is boiling at $136 a barrel because Riyadh is not increasing the output. George W. Bush, during his last visit to Saudi Arabia failed to convince King Abdullah over output boost and since then developing countries like India are struggling to contain double-digit inflation. Petrol-driven economies start collapsing when oil prices head north uncontrollably. Pakistan is an example.
The US, the UK and members of the coalition of the willing (or sinning?) don’t want the world to see the crude reality. What is that? It is Bush’s aggressive foreign policy, the mess he created in Iraq and Afghanistan, and the threats he issued to Mahmoud Ahmedinejad, Bashar Al-Assad, Hassan Omar Al Bashir and to the chiefs of resistance movements in Lebanon and Palestine that drive the oil market crazy and pushes the dollar to the lowest ebb. Today, oil should be at $115 a barrel maximum. The reason behind it being $140 is speculation. Speculators in the market feel jittery after every American threat to “deal with Iran in its own way” and after every US-backed Israeli plan to take out Natanz nuclear plant in Bushehr.
Once Israel stops worrying about Iran’s nuclear programme and the Americans get rid of the Republicans in next elections, oil and dollar will stabilise. Otherwise the day is not far ahead when the Iranian President’s wish will come true. What is that? Oil should ideally be at $200 a barrel.