Going back to no-reforms

Prof Arvind Panagariya point out in his piece in Yesterday ET titled “Indian growth miracle faces threat”

Some excerpts:

“Even those such as Prime Minister Manmohan Singh, home minister P Chidambaram and Planning Commission chief Montek Singh Ahluwalia, who had fought hard for economic reforms in the 1990s, show little keenness for continued pro-market reforms. Indeed, the fear is no more that still-incomplete reform process will not move forward under the present government — that is now old hat — it is that there are realistic prospects of the clock being turned back.

Attempts to enforce the minimum wage are bound to give rise to exactly the same problems in the unorganised as in the organised sector. Producers will shift into more capital-intensive sectors and technologies. Mechanical car washes, construction equipment, agricultural implements, washing machines and power-driven lawnmowers will gradually replace many activities currently performed by hands. And when that happens, the workers so released will have nowhere to go.

The third and final example of a recent policy that potentially sets back progress is the refusal by the environment minister Jairam Ramesh to allow the cultivation of genetically modified (GM) brinjal. Just as the ultra-high standards of social legislation in the area of labour have led to stunted industrial growth, environmental concerns that ignore scientific evidence can thwart a second Green (Gene?) Revolution. Indian farmers have already handsomely reaped the benefits of GM cottonseeds.

GM foods are also not new: they have existed in north and south America for more than a decade. Moreover, based on extensive study by agricultural research institutes, universities, and expert panels , one of which had been appointed by the Supreme Court, our government’s Genetic Engineering Approval Committee has given the brinjal a clean chit. Yet, bowing to groups such as Greenpeace that are committed to opposing GM foods under all circumstances, minister Ramesh has denied our farmers the benefit of the new variety.”