Monday, 24 February 2020

UPA Blurring Common Interests

Updated: January 29, 2011 2:58 pm

What happened during the first fortnight of the New Year, i.e. 2011, has only weakened people’s faith in the UPA-II government. In fact, this period in itself has exposed that the government lacks integrity, orientation and resolve. The first rap for the government came on January 6, when the special court hearing arguments on the plea for closing the over two-decade-old Bofors case questioned the bona fide of the Central Bureau of Investigation in de-freezing Ottavio Quattrocchi’s (the only living accused in the case) bank account in London and giving up attempts to get him extradited to face prosecution in the case. It is to be noted that the investigating agency has sought closure of the prosecution proceedings against the lone surviving accused, Italian businessman Ottavio Quattrocchi, arguing that its plea was “bona fide, in good faith and in public interest”. But Chief Metropolitan Magistrate (CMM) Vinod Yadav said there were “certain mala fide intentions” on the CBI’s parts in its plea to close the case. Although the earlier jolt was delivered two days ago when a recent order by the Income Tax Appellate Tribunal in the Bofors pay-offs case again put the CBI in a fix. While the agency admitted before the court that it agrees with the findings of the tribunal, it still continued to seek withdrawal of the case against Quattrochchi. The tribunal said in the order that kickbacks of 41 crore were paid to the late Win Chaddha and Quattrocchi in the gun deal. Thereafter, the government appeared to be disoriented in solving the Telangana puzzle. The Union Home Ministry’s initiative to call all recognised political parties in Andhra Pradesh for talks on the Telangana issue was welcome. Neither did the Congress come out with any firm stand on bifurcation of the state nor did it voice its opinion to the Srikrishna Committee while all other parties had done so. As the Congress, the major political party of the state, is divided on regional lines on the bifurcation issue, one wonders how it will fare in the future from the region.

                But what turned out to be an albatross round the UPA’s neck is ever-increasing food inflation. Faulty distribution and pricing mechanism of agricultural produce coupled with the damage to crops by untimely rains in certain pockets of the country have led to the over 18 per cent food inflation, just double the percentage recorded one month earlier. In fact, the government which, like the proverbial ostrich, had buried its head in the sand, has suddenly discovered that this is a foolish move when the prospect of danger looms. For a long time, the UPA government has pretended that it can sustain 9 per cent growth without setting fire to prices. Its spokespersons kept saying that by December 2010, inflation would be down to 6 per cent, as if that was an acceptable rate. But now in January, it has pulled its head out and finds that not only has inflation not gone away, it is here to stay. And adding salt to wound is slow industrial growth. Industrial growth, as measured by the index of industrial production (IIP), slumped to an 18-month low of 2.71 per cent. The performance of the manufacturing sector, which constitutes almost 80 per cent of the headline index, was particularly worrisome. Last year’s high base—industrial growth stood at 11.3 per cent in November 2009—coupled with the impact of interest rate increases, inflationary pressures and a moderation in export growth all weighed down IIP growth during the month. So, in this backdrop, the statement like “the government has no tools at its disposal to fight inflation”, on its part, is not proper. It has been made as a tactic to escape from the crisis, when the government has to focus to rein in inflation.

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