‘Market economy needs umpiring’

Staff Reporter

KOCHI: Janata Party president Subramanian Swamy has said that market economy is still the best for the country but it needs proper umpiring.

Speaking at a seminar on ‘World Economic Recession’ held on the School of Communication and Management Studies campus, near here, on Tuesday, Dr. Swamy said there was a middle ground that “we must tread carefully.”

“What has happened is that we today have a situation where the only way to progress is by competitive market economy. The middle ground is a well-regulated competitive market economy,” he said.

Supporting a competitive market economy, Dr. Swamy said that “we do not need market fundamentalism.” “The market needs to be guided. The government has a role to play. A market correction is required,” he said.

Dr. Swamy said the country’s economy would recover by March-April.

Participatory notes

“Participatory notes were a mistake that we made leading to the import of American economic crisis to the country,” Dr. Swamy, a Harvard-trained economist and former Union Minister, said. He said the country would have escaped the whole U.S. economic crisis, if it did not have the participatory notes.

“Participatory notes were the single instrument responsible for importing U.S. problems into India. Had the participatory notes not been there, the whole American crisis would not have touched us. It account for 68 per cent of the total funds that have come from abroad,” he said.

Comparing finance to petrol used in a car, Dr. Swamy said economic growth would not take place only by finance. “Finance is like petrol in a car. You need it. If you have adulterated petrol, you will have problems,” he said.

Stating that the engine of growth was innovation, Dr. Swamy said globalisation could not be stopped. “Therefore, we have to make globalisation manageable. And hence, we must ensure our regulations are in place to see we do not allow globalisation to run wild.”

Dr. Swamy said in an era when every economy had to be competitive “we have to go on updating the regulation. The lesson is that market economy is still the best.” However, the regulatory bodies should have the guts to take a stance, he said.

Pointing out that reckless advancement of subprime loans and proliferation of derivatives were some of the reasons for the U.S. economic crisis, Dr. Swamy said America should regulate its economy much better.

Spectrum allocation

Referring to the controversies over the spectrum allocation, he said the Telecom Regulatory Authority of India (TRAI) had “told some of us that we [TRAI] have told the Telecom Ministry that you have to auction [the spectrum]. The Telecom Minister said TRAI never told them to auction. The regulatory authority should be specific [in its stance],” he said.

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