Liberalization is the buzzword of Indian economy for quite sometime now. It is an ongoing process in our country for about a decade. Dr. Manmohan Singh opted for "free economy" in 1991 succumbing to the pressure from International Monetary Fund and now that Mr. Yashwant Sinha is firmly following his predecessor's path to bring the fiscal deficit in order. The main aspects of liberalization and free economy are - Privatization and Globalization.

The disinvestments of first Public Sector Undertaking in 2000 - 01, Bharat Aluminium Corporation (BALCO) after Modern Food Industries Limited has already accounted for a major controversy. The strategic sale of equity of BALCO, a profitable and cash-rich public sector to Sterlite Industries at a throwaway price is questionable for a host of reasons. And the debate is not over yet as the finance minister, in the mean time, proudly announces that the government has approved privatization in at least 27 more PSUs out of which Air-India, Maruti Udyog and VSNL are on the doors of privatization. The government is also confident of achieving its target as the think-tank believes that the process of bidding and evaluation has matured to a large extent.

Instead, the need is to renounce the obstinate advocacy of privatization on grounds that have not been supported by experience in many avenues one of which being the Airline Industry and the government should rather return to implement the plans to reorganise, modernise and expand profitable PSUs. In the case of BALCO, the necessity was a reorganization intended to allow it the liberty to use its own capacity to mobilize the resources to modernize, expand its captive power facility and lift its profitability. But in contrast, BALCO's profitability has been undermined by the government's own role in installing modernization and expansion. It obviously indicated that modernization and expansion was not even under consideration. That's why the current profit performance cannot be the basis on which the future profile of profits can be estimated.

The finance minister, in his budget for 2001-02 clearly expressed his plans about pruning the workforce by 10% in the next five years which seems to be the only idea the current government has in order to bring in fiscal order. The strategy of the government is to reduce the workforce in public sector by 2% per annum. Similarly, the pressure on private sector enterprises to cut off staff has been on for nearly a decade now. Though Mr. Yashwant Sinha's proposal seems to be quite justified as the superfluity in public sector is indeed a severe problem, there are plenty of such examples in the public sector that involve obvious organizational inefficiencies and it is therefore the inefficiencies in the systems and not the surplus man-power that should be aimed first.

Unfortunately, the government thinks otherwise. A surprising malady seems to have caught the government the symptoms of which are the obsessive attitude of the government with the supposedly huge workforce and an irrepressible impulse of downsizing the man-power, somehow, anyhow. But the talking point is that will the remaining man-power automatically become efficient once the superfluity is removed. Still the image of a bloated and incompetent public sector persists where most of the workers are underemployed and sitting around almost uselessly, probably because the argument is repeated so widely and frequently. And if there is truth in this perception, the solution is surely to use their services more effectively and productively, for no one can argue that there is no real work to do.

In fact, in rural as well as in urban areas the quality of public sector services has even declined over the past decade. This implies that the government should spend more on such areas and therefore recruit more people instead of downsizing. Moreover, for more efficient use of public sector services, the available technologies should be used more effectively. What is more important is that the technology must be a complement to man-power and not its substitute. That's why in a world context of substantial aggregate unemployment, such labour reduction is difficult to justify as it will lead to wastage of huge human-resources. And that makes the obsessive attitude of the government with pruning the workforce so eccentric.

On the other hand, globalization implies the integration of Indian economy with the world economy. It has been deemed as the panacea for solving all the problems because it is presumed to promote competition, efficiency, productivity, cost-effectiveness apart from facilitating technological up-gradation, modernization and growth. But in India the perception of globalization is not so because of the unstable political environment, never satiating government machinery, underdeveloped infrastructure and our inability to sustain growth with corruption ruling the roost almost at all levels.

In the name of globalization, the government has allowed 715 more items starting from meat products to automobile and lifestyle goods to be imported into the country. Most of the items will be sold at prices which our local industries cannot match. That's why the possibility of closing down of our industries cannot be ruled out. And if the major factories close down & new ones don't start, people will be losing jobs all over the place. Even the farmers will not be able to sell their products at a reasonable price. This will hardly help in sustaining a buoyant domestic market which is essential for sustained & broad-based growth of agriculture that in turn contributes towards alleviation of poverty and generation of income and employment. And unfortunately our government appears to be on the wrong foot as it seems to follow the blind alley of indiscriminate liberalization.

The problems faced by our agricultural economy owing to the impact of globalization are acute which clearly shows the lack of vision of our governments. At each step towards globalization warnings were issued by experts, political parties and NGOs about the vicious impact it may have on the economy. Though China is attempting market socialism now, it needs to be accepted that it has done quite some economic levelling over a period of at least five decades. But in a developing country like India where about 50% of the population are below poverty line, globalization is only possible by disorting the common people. So, in a country where more than half of the people are either illiterate or semi-literate, development is possible only by ensuring distributive justice rather than chasing the mirage of economic growth.