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Integrated approach to economic issues

Coverage of economic and business issues was characterised by sustained follow-up, critical analysis and incisive editorials, say P.A. Seshan and P.B. Thiagarajan.

Prime Minister Nehru with administrator-statesman M. Visvesvaraya at Bangalore in 1959.

RIGHT from its formative years The Hindu has provided coverage to financial, industrial and economic issues. Though business reporting was yet to develop as a distinct discipline, the happenings in the general economic sphere as they impinged on the general public were closely monitored and reported. The editorials of those times reflected the paper's concerns for the community's problems.

The Hindu assiduously followed the events and issues affecting Indian industry since those early years of the 20th century. Be it the nascent steel industry or the established cotton mills or shipping, the paper not only reflected the happenings in these fields through its news columns but took unflinching stances editorially on many an occasion.

For example, the young Indian steel industry (mainly the Tata Iron and Steel Company promoted by Jamshedji Nasserwanji Tata) in the early decades of the century had to contend with free imports at low prices.

The Tatas approached the Tariff Board for relief. In an editorial in November 1924 on the Tariff Board's report on the Tata request for further protection and the Government's resolution thereon, the paper urged early action and stated: "It is clear that two factors have contributed to the present deplorable position of the steel industry. The first is the dumping of the Belgian and Continental steel generally in the Indian market at some 25 per cent below their cost of production. The other factor which also has contributed to the present depression in the industry is the rise in Sterling exchange.''

Over the decades, the advent of the Plan era in 1950-51, marking the beginning of a new phase in the growth of the Indian economy and the thinking of the new Government, demanded more attention and news and editorial space. The developments were given prominence in the news pages of the daily in the form of special articles and editorial comment.

With increasing dependence on imports and the dire need to ensure food security, C. Subramaniam, who was the Union Minister for Food and Agriculture, devised a new strategy in the mid-1960s for boosting food production with the use of hybrid seeds developed by Dr. Norman Borlaug, along with intensive application of inputs such as fertilizers and pesticides. From a food importing nation, India became a net exporter. The Hindu played its own active role in this Green Revolution by giving sustained coverage of this success story through reports and editorials. In fact, it can claim to be the only Indian newspaper giving special importance to agriculture.

The drastic devaluation of the rupee in June 1966 came as a bolt from the blue to industries and traders dependent on imports. Indeed, the controversy over the extent of devaluation, if it came, had been raging for some time and the opinions expressed by politicians and experts were featured prominently.

Indeed, when senior members of the editorial staff were having a discussion a few days earlier in the room of the Editor, G. Kasturi, a foreign visitor told them confidently that devaluation was round the corner and asked them what they felt about the imminent decision of the Government. They were all surprised at his observation and told the visitor that drastic devaluation of the rupee was not in the best interests of the economy. There were also reports of undue pressure from the International Monetary Fund and the World Bank for a correction in the external parity of the rupee as a precondition for resumption of external assistance on a larger scale for the Fourth Plan. Eventually, Sachindra Chaudhuri, the then Union Finance Minister, announced the decision to devalue the rupee by 36.50 per cent, a decision of far-reaching significance.

The Hindu accommodated a wide range of news and views for and against the devaluation. The likely impact of a lower external parity for the rupee vis-a-vis all major currencies was analysed by staff writers and outside experts.

The editorial on the occasion gave the background against which the measure had to be viewed and hit the nail on the head by observing, "Devaluation as such is no solution to the basic problems we confront. They stem largely from a grievous failure in the past to relate economic performance to investment outlays, to promote the all-round disciplines required in a developing economy to exercise restraints on inflationary finance, and to release the economy from the burdens of regulations and taxes which have had a stifling effect on growth."

The crisis in the world oil markets in the early 1970s, following the decision of the major oil producing countries to adopt a cartelised approach, created problems for oil importing countries like India.

Special efforts were made by The Hindu's experienced correspondents to examine how the surge in oil production from indigenous sources by the mid-1980s even led to a contraction in imports and foreign exchange outflows on this account.

It was during the tenure of R. Venkataraman as Finance Minister that a massive assistance of $5 billion was secured from the IMF. A controversy arose over the decision to seek the loan from the IMF with stiff conditionalities. The various opinions expressed by political leaders and economic experts on the issue during the entire period were featured in the general pages of The Hindu. There was also special coverage, while editorial comments and analytical pieces in the business section enabled the reading public to have a clear idea of what was involved.

The stock markets turned active in the 1980s with the primary market also becoming buoyant. The healthy developments in the capital market having great significance were highlighted in the business section as well as in other pages of the daily.

However, before the various positive factors for sustained growth could come into full play, the serious balance of payments crisis in 1990 forced the Government to secure the required foreign exchange resources, albeit in an unconventional manner. Gold from the RBI's reserves and Government stocks was pledged with the Bank of England and stand-by credits from the IMF were arranged.

These and other crucial transactions to shore up the balance of payments position were highlighted in the news pages and business section and editorial comments appeared.

The subsequent developments along entirely new lines since the mid-1990s had to be extensively covered to meet the new requirements of the investing public, especially as there was a radical departure in procedures followed for determining the external parity of the rupee and liberalising controls on current account to bring about full convertibility of the rupee on current account.

All these successes were forcefully brought out in the pages of The Hindu.

(P.A. Seshan was Business Editor of The Hindu and
P.B. Thiagarajan was Deputy Editor at the Business desk.)

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