Hit the poor where it hurts

The hyper-inflation has turned vicious because in India the cartels are jacking up prices of basic goods

Kamal Nayan Kabra Delhi

Policy preferences are rarely stated so candidly by policy-makers as we see these days in India. Owing to multiple failures on every single count that matters to the masses, the credibility of the Left-backed UPA regime is at a very low  level. Indeed, instead of addressing these serious issues, the sectarian commitment to the liberalisation agenda is being repeatedly reiterated.

Lower and higher order policy goals too are announced, such as privileging growth — which is the source and mechanism of sky-rocketing profits in the corporate sector — and over inflation control — which is protecting the real purchasing power of the meager, uncertain income of over 85 crore Indians. Even an undergraduate knows that growth in the face of the highly skewed structure may mean nothing to most Indians.

The transition from a creeping inflation of long antiquity to a galloping one would hurt the majority (except for a tiny price-making part of the economy for whom high prices mean higher incomes). Yet, policy pundits in India merrily display a could-not-care-less attitude towards this critical issue.

Policy-makers linked to world capital or their Indian counterparts have declared that economic growth remains the overriding priority. Even inflation control is publicly downplayed. The entire neo-liberal establishment is gung-ho over the seven to nine per cent rate growth rate. 

Not to be left guessing about the real import of economic growth, be it total or per person gross domestic product, let's go to the high priest of conventional market economy wisdom, the London Economist. It said: "Investors care about GDP growth. Corporate profits depend on the absolute rate of growth of an economy. And companies wanting to invest abroad will favour markets that are expanding more rapidly." (March 15, 2008, p 92) Clearly, no such powerful, concentrated interest is there to back up employment growth, control emission to preserve the ecological balance, or have 'acceptable' levels of inflation.