Economics India

Tuesday, February 07, 2006

Should India Expect Early General Elections?

India’s leftist parties have made it known that they are opposed to privatization. Yet they seem to concede to privatization on a case-by-case basis, as they did recently for the proposed modernization of Mumbai and Delhi airports with private sector participation.

Clearly, the main political concern behind the leftist parties' approach is to keep UPA government remain in power as long as feasible and prevent rightist parties' (likely or unlikely?) chance of coming back in power – or at minimum, they want to discourage (Sonia) Congress going on its own in national elections without alliance with leftist parties, until the current five-year term ends!

The politics of India's leftist parties with regard to the country's agenda economic reform is indeed complex and confusing to many, especially when you see that China and Russia to which they look for intellectual guidance or framework are going aggressively for market-based economic development --- knowing well where they want private sector to have a free hand and where the government would continue to play a role on social grounds.

In China, for example, provincial and local governments have set up numerous independent economic entities outside the government administration, which function just as any private sector entity would do -- although notionally, public ownership of asset remains. Russian privatization is much deeper than that -- it is real in most cases but not so real in some cases. Do we see any attempt on the part of India’s leftist parties to clarify their positions in a transparent manner on the privatization question and outline what they see as right and as wrong?

India's leftist parties include the Communist Party of India (Marxist), the Communist Party of India (CPI), the Revolutionary Socialist Party and the Forward Bloc? All these parties publicly supported the recent airport workers’ strike. The strike was withdrawn only after the government assured the leftist parties and airport workers that the latter’s jobs would be protected even under the new arrangment. One wonders how the country would fully realize the potential benefits of privatization if private sector entities bringing in capital and management skills and taking the underlying financial risks are constrained by restrictive labor policies?

For CPI, the struggle on the privatization issue does not seem be yet over -- it has announced that if the UPA government uses now-agreed private sector participation in modernization of Mumbai and Delhi airports as a precursor for further privatization initiatives, it will fight against these at all levels.

What do you think will be the likely political outcome of all this? Should India expect early General Elections? May be not, but at the cost of slowing down mobilization of domestic resources and FDI and, in turn, the country's economic progress which is critical to reduce the poverty at large?

2 Comments:

  • This is another great topic chosen. I believe that India should go for early elections and it looks like that Congress will get a huge Mandate without any support from outside. The present shining face of Congress is really making India a promising land and the golden days appear to be near then.

    By Anonymous Anonymous, at 7:18 PM  

  • CPI(M) politburo wants to continue support to UPA government for some time; oppose any no-confidence motion against the UPA government that may be proposed by Samajwadi party; and yet organize left parties to present unified opposition to government’s “anti-people” policies both in the Parliament and on the streets. The left parties are going to warn the government about issues such as Iran Nuclear Initiative and Privatization at the February 13 meeting with UPA coordination committee. No MP wants to loose his/her full term in the Parliament as he/she stands to loose both power and money -- and face uncertainties of new elections.

    By Blogger Ramesh G. Deshpande, at 8:23 PM  

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