The Telegraph
Since 1st March, 1999
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Feel-good returns in silence
- Govt waves report card with 'bright prospects'

New Delhi, Dec. 13: Feel-good, the most dreaded word in the political lexicon of 2004, is back just when the year is winding down to a close. But neither the Congress nor P. Chidambaram is grimacing.

The finance minister and his team today came out with an economic report card replete with feel-good factors.

'I am optimistic and positive. I think if all players play their part, the year will end on a very substantial and positive note,' Chidambaram said. 'It is fair to say that prospects for economic growth are very bright.'

Chidambaram did pare the economic growth forecast for the year to 6 per cent in the government's mid-year review of the economy from an earlier RBI prediction of 6 to 6.5 per cent in October. But even at this level, it makes India one of the fastest growing economies behind China and Russia.

A weak monsoon, a blow-out in world crude oil prices and a week-long strike by truckers had cast a cloud on the economy.

Higher spending by the government on defence, pensions and interest payments, coupled with a low growth in customs and excise duty collections, also acted as depressants.

One big worry for Chidambaram is that the UPA government has not been able to kickstart the reform process because of opposition from within the coalition and pressure from the Left which provides support from the outside.

Chidambaram's report consequently complained that the 'task of achieving larger foreign investment in key sectors, like telecom, insurance and pension funds remains'.

The government's attempts to allow up to 74 per cent foreign direct investment in telecom, 49 per cent in insurance and up to 100 per cent in pension funds have been stymied.

But the biggest vote of confidence in the triad of reformers in the UPA government 'Manmohan Singh, Chidambaram and Montek Singh Ahluwalia ' has come from the stock market where foreign investors have shovelled an unprecedented $8 billion this year.

On Monday, share prices rose smartly towards the close of trading on the Bombay Stock Exchange (BSE) as foreign funds continued to buy. As a result, the sensex rose by 35.18 points to close at 6268.72.

It has been a tremendous turnaround in sentiment since May 17 when the market plunged to 4505.16, a gut-wrenching fall of over 564 points after the shock election results made it apparent that a Congress-led alliance would form the government.

As stunning as the turnaround is an uncanny similarity with the start of the year when 'feel-good' was the most bandied about word. The previous BJP-led coalition monopolised it as its signature tune but the coinage became a political pariah after the alliance was voted out of power ' which is why no one in the new dispensation is uttering the word now.

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