14th March

Apples and Oranges

The article talks about the new Third Front (TF) that launched itself to battle Congress and BJP in the coming elections but without any core ideology at the centre to hold them together and loads of contradictions within themselves.

The 10-party 84-MP TF formally launched itself on Thursday. The objective was to provide the public, an alternative to Congress or BJP regime. It expects NCP and BJD also to join them post-elections. However, it faces many contradictions that can be self-destructing. There is no core ideology to hold the parties together in the third front. It is a conglomeration of all the parties that have their own agendas and own priorities in mind. No party can claim to pan-India. None of the parties expect to touch the three-figure mark in the general elections. There are too many candidates for the top job unlike Congress (Manmohan Singh) and BJP (L K Advani). There is also a lack of coherent political programme. On the economic issues, Chandrababu Naidu and Jayalalita differ from Third front’s conservatism. Some of the parties are even ready to join BJP or Congress to form the govt if needed. 

Thus, a coalition based on negative agendas can hardly stay longer especially when there is no central ideology that holds them together. 

Relative Comfort

The article talks about the need of keeping the India growth story up despite the declining trajectory of most of the world economies. India is relatively less affected by the global economic crisis and it should leverage this fact to recover as soon as possible.

As the inflation hits the six-year low of 2.43%, everything but food prices has gone down. While the fear is of deflationary trend, it becomes confusing for RBI with respect to its monetary policy decisions if the food prices remain up due to global food crisis. Quick corrective actions are needed to fix the problem. However, there is room for optimism about recovery. Industrial production declined only 0.6% in December compared to the estimate of 2.2%. In January it is still negative but on a growth phase. Growth has been observed in consumer durables and goods and capital goods although manufacturing and mining sector slid. Revised estimates on industrial and agricultural outputs suggest revision in 5.3% GDP growth estimate for third quarter. 

What is to be noted is despite the world hit by crisis, India is better off with being a favored destination for investments. As IMF forecasts negative world GDP growth, first time after WW2, what is needed for India is constant fiscal stimulus and far-sighted monetary policy. Positive sentiments would play a major role in recovery then just govt measures.