Sunday, July 01, 2007

Bad Business!!

Economic and Political Weekly is one of the most popular weeklies for academic papers in India. It is an academic and policy oriented journal for the Social Sciences. In one of the recent issues the editorial reads ‘Crony Capitalism’ to the Fore. Intrigued I continued reading and was shocked by the whole editorial. The editor states that successful business houses in India are now venturing into the political arena and caring none for the ‘aam admi’ (common man). They are also being bolstered by the upward mobile and very socially conscious emerging middle class of the country. He talks about big business houses displacing smaller traders and small farmers of the economy and goes on to say that these individuals are now beginning to lobby towards more conducive environments for businesses. If he had simply stated the same all would be fine. What was shocking to me was that he lamented the fact that big businesses were growing in the country. Sure, it is true that there is a huge and growing gap between the haves and the have-nots in the country, but contrary to popular rhetoric the cause is not businessmen but regulation. The problem lies with improper administration of the reforms. That highly intelligent editors of such popular journals miss such simple economic concepts is shocking to me. To give the editor credit, he also pointed out vested interests of politicians in the current government and that is a valid criticism. But, how come he does not talk about the strong farmers’ lobbies from the northern states that have been keeping agricultural prices artificially high and do not want to let go of subsidies? What about the lobbies of out dated and loss making Fertilizer Companies that have substantial subsidies in tandem with the agricultural subsidies? His selective amnesia is apparent when he also fails to mention the monopoly privileges granted by the then ruling government which was the reason for industrial lobbies during the license raj which led to the concentration of production of certain goods within certain big industry names. It is disheartening to see the path of such editorials.

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