Wednesday, August 24, 2005

mckinsey's rajat gupta interviews manmohan singh

aug 23

the interview sounds good, but it has nothing to do with what's going on on the ground.

the congress is preparing for a snap poll is what the cognscenti are saying.

calculation: congress rule has been so sterling for the common man, and the bjp is so much in disarray, that a new election (cost: $5 billion) will entrench sonia and co in power on their own without the need for the pesky marxists to support them.

possible reality: $5 billion dollars later it will be another hung parliament, with the congress at 125 seats (a little less than what they have), the bjp at 120 seats (a little more than what they have), marxists win in w bengal and kerala with thumping majorities. status quo ante, but $5 billion has vanished in unaccountable ways. nice way of greasing the wheels.

nobody is bothered about the strategic and other problems the nation is facing (small and non-exhaustive sample below):
a. defanging of entire nuclear arsenal via intrusive IAEA inspections
b. pak gets nuclear capable cruise missiles from china
c. china gets bases in maldives, bhutan and nepal
d. japanese FDI which had picked up after anti-japan riots in china, plummets after anti-honda riots
e. continued attacks on hindu institutions and leaders
f. the huge difference sky-high oil prices make; investment in alternate energy is near zero, as the energy ministry runs panting after iran, kazakhstan and, absurdly, china
g. the runaway activism of the courts and rogue elements in government intent on re-toxification
h. continued paralysis in infrastructure improvement
i. the severely deteriorating education system
j. huge opportunity for pork-barrel spending based on the insane 'employment guarantee program' which will transfer $100 billion into the pockets of party functionaries. it is worth noting that the *biggest* employment mechanism in recent times has been the deregulation of telecom and the emergence of millions of PCOs. the second biggest employment mechanism has been the deregulation of broadcasting and the emergence of hundreds of thousands of cable operators. note: in both cases, the predatory State withdrew and individual entrepreneurship blossomed
k. the end of liberalization, as the divestiture program has been formally canceled
l. the continued downgrading of agriculture (note that manmohan singh once again repeats the conventional wisdom that people must be moved out of agriculture. on the contrary, as rajat gupta asked, the point is to upgrade agriculture with processing and transportation investment, as india has great competitive advantage therein and it can provide sustainable employment)

meanwhile indians happily plough ahead listening to the same old warmed-over nostrums of fifty years ago: all of which have proved to be inane.