Date: June 16th 2008

Date: - 16.6.08

The Pioneer Edit Desk

After promising to protect the interests of the aam admi, who the Congress claimed had "suffered" during the NDA years, the UPA Government it now heads has delivered a double whammy: Skyrocketing prices and declining growth. The affluence of the NDA years has been rendered a thing of the past as the Congress gloats over its gross mismanagement of the national economy which is now in a free fall. Such is the calibre of our 'economist' Prime Minister and his 'brilliant' Finance Minister that they are totally clueless about what has gone wrong; to expect them to steer the national economy through choppy waters so that it does not founder would be both unfair and unrealistic. A measure of just how rapidly the situation is turning from bad to worse has been provided by statistics released last Friday: Inflation has reached a seven-year high of 8.75 per cent. The Congress can no longer claim that people are better off now than they were when the BJP was in power -- unless the drumb
eaters of 10 Janpath have willed themselves into believing that being forced to pay more for less has left the masses cheering for the UPA Government. The real rate of inflation would be much higher than 8.75 per cent if we were to factor in the rising cost of services; once the steep increase in the prices of petroleum products is factored in, the rate of inflation would be well above 10 per cent. So, we have a Government which fooled the people into believing that it will deliver double-digit growth, but in reality is preparing to demit office after gifting the nation double-digit inflation. There is further bad news in the offing: Economists have warned that the worst is yet to come.

Meanwhile, the Prime Minister and his colleagues are exerting to add fuel to the inflationary fire. Raising the minimum support price for paddy is an example of their knee-jerk reaction to the looming crisis. To escape censure, the Congress insists that inflation should not be made into a political issue by the Opposition; the Prime Minister, after thumbing his nose at the Opposition, now wants a consensus on how to deal with the problem. There is no reason why the Opposition should oblige either the Congress or the Prime Minister: They must bear the consequences of their inability to prevent the situation from coming to such a sorry pass. It is laughable that those who want to place the national economy above partisan politics are busy scoring points with non-Congress State Governments over the issue of minimum support price for paddy. We are yet to see any meaningful intervention by the Government by way of holding interest rates, leave alone reducing them -- with the Reser
ve Bank of India revising the repo rate, it is only a matter of time before banks hike their interest rates, which in turn will adversely impact consumers and key sectors like housing and industry, thus further depressing market sentiment. Already, stocks are tumbling on the bourses and mutual funds are posting falling profits -- the blue chip mutual funds have lost as much as 35 per cent this year and we are not even half way through it. Middle class aspirations and the impetus to perform are at a discount; enterprise is once again a meaningless word. A rent-seeking Government given to squandering money on hare-brained schemes has trampled over the gains of the NDA years. The Congress can seek comfort in the fact that the Communists are celebrating India's stumble and fall.