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Political stability as real engine of economic growth

Written By Gopal Krishna on Friday, April 24, 2009 | 3:30 AM

Apropos ("CORPORATE ENTRY INTO VILLAGES: All eyes on rural silver", Deccan Herald), in the backdrop of the parliamentary elction underway, one can safely say that political stability is the real engine of economic growth especially keeping in mind the unfolding adverse effects of financial crisis and rising food prices.

But likes of P Chidambaram wish to "make financial services the next growth engine for India", newspapers like Business Standard argue for converting "cities into engines of growth", some corporate CEOs announce retail as the key economic engine of growth, some say manufacturing, some others say housing and now we hear villages as engines of growth even as the promise of "electrification of the remaining 125,000 villages and 2 crore 30 akh households by 2009" is yet to be fulfilled.

It must be remembered that "Transnational corporations (TNCs) as engines of growth" have been the main tenet of every theory of international business since the early 1950s although in India it revealed itself in mid 1980s. The World Investment Report 1992 argued for TNCs as engines of economic growth. It noted that dramatic policy changes in countries like India opened their economies to greater contributions by transnational corporations. The corporations had entered and shaped the policies and laws that could govern them long back, their entry into the villages and agricultural lands is their next logical step.

It is no more surprsing that the plight of rural poor and urban poor is dismmised as collateral damage for economic growth saying, "Where the commercial venture or enterprise would bring in results which are far more useful for the people, difficulty of a small number of people has to be bypassed. The comparative hardships have to be balanced and the convenience and benefit to a larger section of the people has to get primacy over comparatively lesser hardship. " There is almost a political consensus that it is the most desirable mode of development and economic growth. And now news or views on exploitation by all and sundry in the poorest states like Chhattisgarh, Orissa, Jharkhand and Bihar is recieved with frozen passivity. What and who can hammer or melt such passivity?
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