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Reforms, what is that about?

india Updated: Jan 26, 2007 03:33 IST
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The economy makes for some very intense and passionate debates. Or so we thought, till we actually went to people and asked them in plain language about some of the big terms that come up during such debates.

In the second week of January, the HT-CNN-IBN State of the Nation Survey talked to 7,681 people spread across 970 villages in 19 states of the country. This led to an embarrassing discovery: only three per cent Indians had a fair idea of what economic reforms were all about. To the rest, globalisation, disinvestment, free trade and foreign investment were jargon — 72 per cent Indians were unaware of the economic changes that the country has been going through since 1991.

Of course, 28 per cent people claimed they had heard about the new economic policies. But most of them did not have even a rough idea of the broad directions of the policy changes: deregulation, disinvestment, free trade, foreign investment and ‘liberal’ labour laws. Even among the most educated and those with exposure to the media, this figure was only 14 per cent.

Therefore, instead of asking them about actual economic policies, which they know little about, we gave them two fairly worded policy options, and asked the people to choose one. For instance, we asked them to choose from one of the following statements: Number of government employees should be reduced because paying their salaries leaves less money with the government for people’s welfare or The number of government employees should remain as it is because we need them to run the country.

The findings bring little cheer to ardent supporters of reform:

•The Indian public is, on balance, clearly opposed to disinvestment of public sector undertakings, downsizing of the government and entry of foreign companies. Those who are well informed about these policies are even more opposed to these than the less informed.

•There is little demand for reduction in direct taxes. If the finance minister wanted to increase the tax on the rich, he would have solid public backing from all quarters except, of course, the urban rich.

•There is an overwhelming agreement that public services like electricity, water, road transport, hospitals and schools should be run by the government and not by private companies.

•If running these public services well requires increasing the fee or tariff, the people, including the poor, are prepared to shell out more money.

•The public believes that the economic policies of the last 15 years have benefited only the rich. Only about a quarter of the respondents, more rich than the rest, believe that the reforms have benefited the poor as well.

To put it simply: if anyone cared to put policies of economic reforms on the political agenda and asked the public for its opinion, there is every chance that these policies will be voted out.

But it is too soon to conclude that the condition of ordinary people has deteriorated during the last 15 years of reforms. When asked about that, very few people, even among the rural poor, said that the economic condition of their families has worsened. Most of the people reported an improvement or stability in their economic conditions. Add to this their overall sense of satisfaction with their economic conditions, positive view of the country’s economy and their optimism about the future.

But remember, only 3 per cent know about these economic policies. Now you perhaps know why a policy that does not seem good for the economy can be implemented in a democracy.

(Kumar and Yadav are social scientists working with the CSDS, Delhi)

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