India’s reforms spurred inequality
Former Finance Minister argues that the lack of support for economic reforms reflects their failure to spread the wealth to India’s villages.
Former Finance Minister Yashwant Sinha explained why there's no consensus on economic reforms, despite strong support from the business press.
Why are economic reforms unpopular amongst political parties and the aam admi? Why is their constituency limited only to economists, economic administrators, industrialists, bankers and the pink media? To my mind, the reasons are not too far to seek. Economic reforms have no doubt brought economic growth, prosperity, increased per capita income and improved living conditions, but these benefits have not been shared widely amongst the people and regions of the country. Economic reforms have only accentuated regional disparities, income disparities and caste and class disparities. The explosion in the field of media and IT has acerbated it further. The unrest that we see in the rural areas often resulting in violent movements can be directly ascribed to this sense of loss and deprivation among large sections of society.
Read the full article in India Today here.
Sinha's points, of course, are the same as those I made last week. But that answer is not an end to reform, either. The answer is making it work, collecting more tax revenue, and pushing that money into government programs that not only alleviate poverty but also increase the earning power of the poor.
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