.Dr Desai is right , UPA-II did manage to deliver growth through gradualism in policy ,only to be muted by gross lapses in implementation.In contrast, the growth mantra that blessed political fortunes of BJP is to yet propitiate the deities of Economy. BJP's "auction syndrome " ,perhaps more in selective disassociation with actions of UPA, is being pursued with speed and elan, to ostensibly fibrillate and regain a healthy pulse.But there could be booby traps down the road.
First the existing huge exposure of PSU banks to the infra sector stands to explode on fresh demand ,post quick fire big ticket auctions everywhere.Already PSU banks are ailing from high NPAs. Big business houses are yet to figure in the list .Their reports due next quarter, may add to the woes, since global economic recovery particularly of the US ,is still uncertain .Restructuring the debts then , would invite a protracted burden on the exchequer and hit fiscal balancing for far longer.Then again treacherous crude prices could skew the ledger further.
Second ,high costs of acquisition of vital resources,touted today as a bounty,would shoot up input prices to every single industry to open the floodgates for inflation .Exploitation of sub subterranean resources come with inbuilt and long gestation periods and advantages through economies of scale, would only kick in, far later.
If in the single minded pursuit to control of inflation , the PM ,Ms Thatcher in the '80s overlooked growth , all but abandoned UK's industrial policy and wiped out more than 15% of Britain's industrial base on bad monetarism, we today, might well be doing the opposite, singularly pursuing growth, to re- invite a larger avatar of an inflation that we are bitterly engaged with, for more than three years now.
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