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How To Tide Over Sanctions

It seems the Indian government is doing nothing to face the economic sanctions imposed by western nations. All it has done, to date, is make funny statements about these countries.

India, the government keeps reiterating, has decided to 'retaliate' against the sanctions. But nobody in the North Block or South Block is able to answer how exactly this hitback would come. The Indian share in the global trade is only 0.8 per cent, so how are we going to do it if it is economic retaliation the government is talking about? On the other hand, Pakistan has taken the sanctions very seriously. Massive preparations are on to face them. Everyday Nawaz Sharief is on television announcing a new decision.

India is a bigger nation than Pakistan, but our economic situation is not good enough to take on the developed nations. What I found in the finance ministry is that our people are least bothered about the sanctions. They are being carried away by the statements of politicians. The leaders of the ruling party are not telling the truth to the people. The mandarins in North Block say that the sanctions will not harm us. They claim that even if it does, it will only happen after 15 months. This is a very foolish argument.

The government forgets that we have got commitment worth billions of dollars in the private sector by various foreign companies, banks and financial agencies. They are now reluctant to release money. We were supposed to get billions of dollars through external commercial borrowings. But now, foreign banks are delaying the deals. Besides, the government has framed such absurd rules that you can borrow money from the international market only through banks and agencies. This is the time when we should welcome foreign exchange from all channels, whether private or otherwise.

In Pakistan, Sharief has cut the government expenditure by 20 per cent and appealed to all non-residents Pakistanis to send one thousand dollars every month to their families and relatives. We do not need to go to that extent. By opening our economy and shutting the swadeshi rhetoric, we can easily tide over sanctions.

Foreign companies were expecting liberal policies from the new government. After the nuclear explosions, they had reasons to snub the US government. But we missed the opportunity to provide that excuse to them. I would like to thank Union Industry Minister Sikandar Bakht, who took the bold initiative in the Maruti affair and stopped the nonsense. Now Japanese companies are looking towards India. Japan is keen to invest here after the South Asian market crash, but the nuclear explosions have deterred them.

Meanwhile, seven mega power projects sanctioned by the I K Gujral government in the private sector are facing rough weather because of Prime Minister Atal Bihari Vajpayee's new policy on the issue of counter guarantee. The promoters of these projects have urged the Union power ministry to review the decision. It had been decided right from P V Narasimha Rao's days that the counter guarantee for mega power projects in the private sector would be given by the Government of India. The Union government had very selectively given guarantee to eight projects.

Now, a circular has been sent by the power ministry to the various state governments concerned that the issue of counter guarantee would be decided by the states, and they should take the responsibility. This decision came as a major setback for the state administrations as no state is able to give any counter guarantee because of financial crisis. Not only this, the foreign collaborators in these projects are not willing to accept the counter guarantee of state governments.

Rajiv Shukla