What are the factors that here contributed to such a dismal situation in the Indian economy? We can pick up some, without going into scholastic details. First of all, the Central Government locks focus in its economic polices and is perhaps yet not ready to set its priorities right. It has not perhaps in its mind clarified how it would reconcile to globalisation with Swadeshi, and to what extent. The nuclear tests may have been consistent with the tenor of Swadeshi, but are the economic sanctions which followed consistent with our liberalisation stance? The Ministry of Finance has to clarify. Secondly, despite good monsoon in generally failure of the government to see to it that traders speculate at the retail level do not raise prices of food articles and also to a large extent the failure of our state managed delivery system designed to reach the poor. The inflation across the country was so widespread that the ruling party at the centre received serous reversals in recent by-election to the state assemblies. The state governments are also equally to be blamed, except with the maginal moderation that perhaps the uncertain by with respect to non-action by the Central Government induced the state governments to act passively, which aggravated the scenaio.

The budget deficit of the Central Government as a proportion of GDP has been steadily rising and has already risen close to the pre-reform days. Unfortunately, no serious effort has yet been initiated for macro economics/management, perhaps because the government is not clear its objectives. This has affected growth of money supply, fuelled infation to a certain extent, and difinetcly worsened our trade balance. Thirdly, the government has failed to come out clearly on Agricultural Sector Reforms Policy although some progress had been made by the earlier governments. Does the present government want to have a rethinking on the formulation of New Policy on Agriculture? Too much ahocism in the realsd of our agricultural sector is leading the economy to serious crises in the coming years. It is well known that the policy on agriculture is council to sustain the growth process of our economy and to provide a safely net to our poor househelds.

Finally, I would urge the government not to blindly pursue the policy of selling out the profiable reterival assets in the name of privatisation. The basic objective of privatisation has been to get rid of sick non-performing unity so that our fiscal deficit does not turn worse. But primarily all the Governments have used this ‘as an important to fill up its lacune in resource mobilisation. This is a serious problem on which the government, if it is clear in itself, should come clear on its disinvestment policies in the medium run. Otherwise, ad locism would lead to economic disaster. Half marked reform or half-baked Swadeshi are both bad economics.