The views expressed by the Prime Minister in a meeting after the Cabinet reshuffle vividly indicate that the country’s state of economy is in shamble. Union Finance Minister P Chidambaram also dwelt on the gravity of the economic crisis. According to him, there are hundreds of projects worth Rs 7500 crore which have been stuck for the last so many years and around three hundred of them are in limbo owing to the redtapism in various government departments. Consequently, both the domestic and foreign investors, he said, are distancing away from investing in India. The Finance Minister has opined that if the situation does not improve, the credit rating agencies would downgrade the ranking of Indian economy. Despite knowing all these odds, no any tangible changing is likely to ensue after the meeting of the council of ministers. It is so because new Petroleum Minister M Veerappa Moily on the same day forbade oil companies from increasing the prices of non-subsidised LPG cylinders without showing any reason. Moreover, the news is doing the rounds that the government is contemplating to increase the number of subsidised LPG cylinders. The Centre said to shoot off letter to the states to share a part of the burden of subsidies on kerosene and LPG. It means the government is backtracking its recently declared stand to slash subsidy on fuel.

The recent two major decisions are reducing the subsidy on fuel and allowing Foreign Direct Investment (FDI) in retail sector. The decision to allow FDI in retail cannot be deemed to be a big move on economic front and even though one agrees to this for a moment, it hardly seems that the decision is going to bear any fruit immediately. Given the present sluggish economic scenario, it is doubtful that foreign companies will come to invest in India. Seeing the vehement protest by almost all the opposition parties on FDI and the government’s back-breaking efforts to justify its stand in this context, it seems almost impossible that foreign companies will be attracted to invest in India. It cannot be overlooked that foreign investors are already skeptical about condition of Indian economy. The charges of policy paralysis in the government, which is widely talked about by the investors, now seems to be a reality and even the Finance Minister has also conceded to the fact in the meeting that redtapism has stymied the progress of hundreds of projects. Speaking in the same meeting, the Prime Minister advised his ministers to jack up pace of their assignments without heeding to the allegations. At a time when corruption charges are surfacing day after day and some people are specially engaged in unveiling the irregularities and malpractices in the government, it is impertinent to say that ministers should not get distracted with such allegations. It is noteworthy that such allegations have also embroiled the Gandhi family.

Though, the Congress and the Centre are denying the allegations of any suspicious land deals between party chief Sonai Gandhi’s son-in-law Robert Vadra and real estate giant DLF, it is unjustified to dub the charges in this regard as baseless. Both the Congress and the Centre are also rejecting the allegations leveled against Sonia Gandhi and Rahul Gandhi by Janata Party chief Subramanian Swamy, but Congress secretary general Rahul Gandhi’s acceptance to have lent Rs 90 crore to Associated Journals shows that everything is not hunky and dory. It is wrong on parts of the policy makers of the UPA government to believe that they would be able to revive the faltering economy while overlooking the corruption charges. The present negative mood on economic front could be dispelled only when the government agrees to come clean over these allegations. The Centre should realize that this ambience of negativity has been created largely owing to the unearthing of the string of scams. First it was the case of embezzlement of funds in organizing 2010 Commonwealth Games which was immediately followed by 2G spectrum scam and now the CAG’s report regarding the irregularities in allocation of coal blocks. The government is flooded with such allegations. Being embroiled in controversy, the ruling establishment at the Centre is not in a position to encourage the business houses for investment. It is also not in a position to ask the bureaucrats and members of the Council of Ministers to go ahead with their assignments while being unfazed of these allegations. The corporate world will turn up for investment only when it will be reassured that the government is confident enough to carry forward the economic reforms.    The government cannot blame others for the present gloomy condition. It should realize the fact that the corporate world despite having desire to do so, are reluctant to invest in the market. Whenever the investors have moved ahead, they have met with obstacles in the form of lackadaisical attitude of bureaucrats.

The negativity on the economic front and disappointment in the world of industries grow because almost all political leadership has been clouded with the controversies. After the recent allegations against Nitin Gadkari, the BJP too has also landed in trouble. It is profound irony that both the political parties, the Congress and the BJP, which are faced with serious corruption charges, are averse to allow probe into allegations against them. If the allegations are not investigated, the present murkier condition would not end. Notably, the present ambience of disappointment is the biggest impediment in the way of economic progress of the country.

The global economic slowdown is also a reason behind the lackluster situation on the economic front which was underlined by the Prime Minister in his statement, but the negativity born out of the government’s slipshoddiness over the issue of corruption is much bigger reason behind this depressing situation. This situation persists despite the recent decisions of the Centre to push reforms and reshuffling the Cabinet, which is a matter of serious concern. The government continues to sink in the mire of corruption charges which spark a kind of suspicion in the minds of corporate honchos regarding the credibility of the government. It is difficult to decipher why our policy makers shy away from the reality that they are required to give equal importance to both the economic challenges as well as the issue of corruption. If the allegations against the government are overlooked, it will only deepen the crisis which has shadowed the government since long and rendered both the domestic and foreign investors skeptical about the government’s capabilities.

(An original copy of the article published in Hindi on November 4, 2012 translated by the English Editorial. The author is Group Editor of Dainik Jagran)