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Thousands go on strike in India over plans to jump-start economy - thestar.com
For years, critics frustrated at the slow pace of economic reform in India heaped criticism on the government for its muddled policies and inability to stare down vested interests.
On Thursday, days after officials finally announced decisive reforms, those vested interests made eminently clear their displeasure over the cabinets decision to cut fuel subsidies and allow foreign investment in the retail, aviation and broadcasting industries.
In a show of force, the main opposition Bharatiya Janata Party backed by left-wing parties called a nationwide general strike. Trains, buses and rickshaws stopped rolling from early morning in several of Indias 35 states and union territories, over 1 million shops were shuttered and effigies of the prime minister were burned as thousands of workers and owners of small stores marched, waved flags and blocked traffic.
Some kiosks were attacked and tires were burned to block traffic, while some shops that remained open, including a Walmart outlet in central Uttar Pradesh state, were forced by angry mobs to close for the day.
But the picture was mixed. Even as activity came to a near halt in the states of West Bengal, Uttar Pradesh, Bihar and Orissa, the day was relatively normal in New Delhi and the states of Kerala and western Maharashtra state, where the commercial hub of Mumbai is based.
Under the announced reforms, foreign ownership of up to 51 per cent will be allowed in supermarkets and chain stores such as Walmart. Local airlines will be able to sell shares to foreign carriers. And foreigners can take stakes in broadcasting and parts of the electrical power industry. As part of its bid to jump-start the flagging economy, the government also vowed to sell off stakes in resource companies it runs.
The outcry that has followed highlights the pronounced gap in Indian society between the middle class that wants better service, presentation and choice in the growing number of air-conditioned malls, and the hundreds of millions of people working and shopping in mom-and-pop stores who fear that added efficiency will kill jobs.
Small shops cant compete with these big guys, said Uma Shankar, 48, owner of a pharmacy filled with dusty shampoo bottles and medicine boxes stacked haphazardly in New Delhis Vasant Vihar neighbourhood. This is a set-up between the government and foreign companies. Were barely scraping by. Where will we go?
The decision also sparked a political shakeup after the second-largest partner in the ruling Congress Party-led coalition, the mercurial Trinamool Congress Party, announced its intention to withdraw from the government by Friday unless reforms are rolled back.
Although Trinamool only holds 19 of 541 seats in the lower house of parliament, its departure would put an end to the governments parliamentary majority, raising the chances of early elections. That has sparked a mad scramble this week as other minority parties, sensing opportunity, line up to be courted and cajoled by Congress Party leaders.
Among the most politically sensitive reforms is the 10 cent per litre increase in diesel prices and limits on subsidized cooking gas. As Indias fiscal situation and the global economy have weakened fuel subsidies amount to $32 billion a year and the countrys debt ratings are one notch above junk-bond levels the government has been pressured to take this unpopular step.
Foreign stakes in Indias retail industry, which supports more than 200 million people working in an estimated 50 million stores, are also creating friction. India is heading toward economic slavery, said Rajnath Singh, a Bharatiya Janata Party leader, during a protest Thursday.
Late last year, the government announced a similar opening of the retail market, only to rescind it under political pressure.
For years, critics frustrated at the slow pace of economic reform in India heaped criticism on the government for its muddled policies and inability to stare down vested interests.
On Thursday, days after officials finally announced decisive reforms, those vested interests made eminently clear their displeasure over the cabinets decision to cut fuel subsidies and allow foreign investment in the retail, aviation and broadcasting industries.
In a show of force, the main opposition Bharatiya Janata Party backed by left-wing parties called a nationwide general strike. Trains, buses and rickshaws stopped rolling from early morning in several of Indias 35 states and union territories, over 1 million shops were shuttered and effigies of the prime minister were burned as thousands of workers and owners of small stores marched, waved flags and blocked traffic.
Some kiosks were attacked and tires were burned to block traffic, while some shops that remained open, including a Walmart outlet in central Uttar Pradesh state, were forced by angry mobs to close for the day.
But the picture was mixed. Even as activity came to a near halt in the states of West Bengal, Uttar Pradesh, Bihar and Orissa, the day was relatively normal in New Delhi and the states of Kerala and western Maharashtra state, where the commercial hub of Mumbai is based.
Under the announced reforms, foreign ownership of up to 51 per cent will be allowed in supermarkets and chain stores such as Walmart. Local airlines will be able to sell shares to foreign carriers. And foreigners can take stakes in broadcasting and parts of the electrical power industry. As part of its bid to jump-start the flagging economy, the government also vowed to sell off stakes in resource companies it runs.
The outcry that has followed highlights the pronounced gap in Indian society between the middle class that wants better service, presentation and choice in the growing number of air-conditioned malls, and the hundreds of millions of people working and shopping in mom-and-pop stores who fear that added efficiency will kill jobs.
Small shops cant compete with these big guys, said Uma Shankar, 48, owner of a pharmacy filled with dusty shampoo bottles and medicine boxes stacked haphazardly in New Delhis Vasant Vihar neighbourhood. This is a set-up between the government and foreign companies. Were barely scraping by. Where will we go?
The decision also sparked a political shakeup after the second-largest partner in the ruling Congress Party-led coalition, the mercurial Trinamool Congress Party, announced its intention to withdraw from the government by Friday unless reforms are rolled back.
Although Trinamool only holds 19 of 541 seats in the lower house of parliament, its departure would put an end to the governments parliamentary majority, raising the chances of early elections. That has sparked a mad scramble this week as other minority parties, sensing opportunity, line up to be courted and cajoled by Congress Party leaders.
Among the most politically sensitive reforms is the 10 cent per litre increase in diesel prices and limits on subsidized cooking gas. As Indias fiscal situation and the global economy have weakened fuel subsidies amount to $32 billion a year and the countrys debt ratings are one notch above junk-bond levels the government has been pressured to take this unpopular step.
Foreign stakes in Indias retail industry, which supports more than 200 million people working in an estimated 50 million stores, are also creating friction. India is heading toward economic slavery, said Rajnath Singh, a Bharatiya Janata Party leader, during a protest Thursday.
Late last year, the government announced a similar opening of the retail market, only to rescind it under political pressure.
Protest already happened. After reforms economy is showing signs of getting stronger.
