“India Survived Slowdown Because of Nationalization”

This is a very interesting view. I wonder how many here would agree with this assessment. -YLH

Kolkata: Finance Minister Pranab Mukherjee Sunday ruled out privatisation of state-run banks and said market economy was not the solution to the nation’s economic problems. Recalling that the late prime minister Indira Gandhi had nationalised banks 40 years ago in 1969, Mukherjee said, “We survived the economic meltdown because of this step. In the world’s leading countries, the finance sectors have crashed but we are still surviving because we nationalised our banking sector.” Rather than privatising banks, he said, the government policy was to strengthen the state-run banks. “The government will always have at least 51 percent stake in them,” Mukherjee said while inaugurating the 28th conference of the West Bengal unit of the Indian National Trade Union Congress (INTUC). He said economic reforms were needed, but the stress would be on fulfilling the needs of the “aam admi” (common man). “Market economy cannot be the only end of economic reforms. Unbridled market economy is not the right thing. It cannot be the panacea for our economic problems,” he said. The United Progressive Alliance (UPA) government was trying to frame policies that will bring about an economic uplift and safeguard the interests of organised workers and farmers, besides those in the unorganised sectors. “Sonia Gandhi has asked me to discuss the matter with the INTUC. I shall do so,” he added. Unless the purchasing power of the working class is raised, the country cannot prosper, Mukherjee said. “So our main aim is to eradicate poverty. We have the National Rural employment Guarantee Act (NREGA). We will introduce similar schemes to raise the purchasing power of the poor people so that companies’ productions are unaffected by lack of demand”.

1 Comment
Filed under India
Tags: Banks, Congress Party, Indira Gandhi, nationalization, planned economy

1 Comment
Hayyer 48
July 28, 2009 at 9:42 pm
Pranab Mukherjee is the original Reliance man. He was the face of Indira Gandhi’s kleptocratic state.
Indian nationalized banks have the worst performance ratios. Private Indian Banks that did not exist in 1969 (the year of bank nationalization) did better than the nationalized ones. Foreign banks in India such as the Standard Chartered Bank, Barclays and HSBC have had no problems. It is another myth of Congress propogandists that Bank nationalization saved Indian banks.
Even before the international crisis nationalized banks were regularly getting into crises and were being bailed out by government.
Mr. Mukherjee despite a long career as convenient minister never managed to win an election till 2002 courtesy the Communists. He was their main defender in the last parliament. This time he won courtesy of Mamta. He was always before this, Finance Minister courtesy Upper House nominations, and is even now PM in waiting should MMSingh take a fall. MMSingh was in if memory does not fail me, his Governor of the Reserve Bank.