If these are economic reforms, I’m Amitabh Bachchan…

A superb post from R. Jagannathn at FirstPost.com (HT: TGS Blog).

One could not say it any better:

Anyone who’s never tasted butter will be glad to accept margarine as the real thing. This is the case with reforms and the UPA government. Having never seen real reforms for more than eight years, everyone has forgotten what real reforms are all about – changing the game, not the player uniforms. The recent burst of “reforms” are actually little more than palliatives – however welcome they are as a signal of change.

Ask yourself:

How is raising diesel prices to prevent bankrupting the oil companies reform? This is like saying sending a heart patient to the ICU is a sign of rude good health.

How is the sale of public sector shares – without any impact on the management – economic reform? Is selling your silver to feed your family a sign of terrific intelligence? It is a mere survival tactic.

How is permitting FDI in aviation and big retail reform? Investment was always open to domestic investors; even foreign investors could invest in both sectors with conditions. What has really changed is that foreign airlines can now invest in aviation (earlier, only non-airline companies could). This change is thus about eliminating a stupid rule imposed by crony capitalism earlier.

As for retailing, foreign companies were permitted to invest in the back-end even earlier. They were barred only from the front end. If the main benefits of big retail are supposed to come from back-end ops (cold chains, wholesale trade, reduction of middlemen, etc), but this option was always available to the Wal-Marts of the world. So putting a Wal-Mart board on the storefront is reform? Of course, this will make them invest more, but one can only call this incremental reform, not Big Bang Reform.

Read the post for more details..

I did written something similar to a friend on these reforms and said if these are reforms, I am the best economist in the world!!



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