Indira Gandhi fails to prop up weak economy
Indian Prime Minister Indira GAndhi's election pledge to put the country back on its feet after a period of political instability and economic drift has not yet materialized.
After nearly three months in office the danger signals are everywhere to be seen. And Mrs. Gandhi, with an eye to approacing elections, shows no signs yet of aplying the firm hand of government that she promised voter is the january election.
Indian's economy, especially in the agricultural sector, was making impressive progress. But these gains began unraveling last year as a result of weak political leadership. They were compounded by the collpse of the dissensionracked Janata Party government on July 15,1979.
The sense of drift that accompanied the political crisis has resulted in what many observers see as gross mismanagement of the economy.
Here are some of the Telltale signs:
* after a trend rate of 5 percent growth in recent years, the gross national income will drop by 1 to 2 percent for fiscal 1979-80, which ends on march 31.
* Industrial production, targeted to go up by 8 percent in 1979-80, is near stagnant.
* After a record harvest in 1978-1979, this past year has brought the worst drought in 60 years. the effect has been a 6 percent fall in agricultural production.
* Industrial output has been hit by inadequate coal supplies. Coal output has remained stagnant for five years, and available coal is not reaching its destinations because of transport bottlenecks. Mrs. Gandhi's pledge to give India a government that works has not taken hold yet.
Her government's preoccupation has been with political consolidation, not economic recovery. She has already dismissed governments in nine of the states ruled by her opponents. She hopes to win these states when elections to their legislature are held in May.
Since hard economy decisions like a stiff dose of taxation to meet the big deficit in her budget for 1980-81 would be inexpedient with elecions around the corner, she has postponed all new taxes until May or June
Containing 20 percent inflation also calls for hard measures which Mrs. Gandhi's government is unwilling to take until after these May elections.