Indian Economy Collapsed...

Vajpayee's party has reversed its policies. It fought tooth and nail against the entry of foreign insurance companies into India, but is now even more enthusiastic than Congress in welcoming them.

And it has not cared to explain the reasons for this volte face.

You see the same change in policy in the case of the patents bill. The same bill that was rejected two years ago has been introduced by the new government, without so much as an apology.

Indian businessmen have a lot to lose if the bill goes through, and they think that the government is hostile to them. Indian businessmen are not against reforms but reforms are useless if the benefits go mainly to foreigners. This is what is going to happen if the patents bill goes through.

The Vajpayee government may please foreign investors by opening the doors to them, but in the process it has antagonised Indian businessmen.

This is precisely why Manmohan Singh's reforms went down badly with most Indians who then proceeded to throw out the Narasimha Rao government. The same thing is happening to Vajpayee government.

In the last six months, gold worth Rs 105 billion has been imported. This is twice the amount imported last year during the same period. No businessman worth his salt is going to put his money into gold, unless he has given up on the future. If the government is hostile to him, he is going to be twice as hostile to it.

No investment, no growth, it is as simple as that. For every dollar that the foreign investor brings in, you need three dollars from his Indian counterpart. And he will not part with his cash if he believes that the government, his own government, is not friendly to him. Especially a government that came to power on the slogan of swadeshi!

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