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Friday, February 03, 2006

Thatcher moment in Indian Economic Reforms?

PM Singh Takes A Stand For Infrastructure Reform, Finally!

Has the Thatcher moment comes to Indian economic reforms finally? After two years of doing nothing in power with his hands tie by Communists allies, PM Manmohan Singh is finally taking a stand. Right before this year’s Davos WEF conference the retail sector was opened, if only partially, for FDI. Limits were increased or removed in many of industries. The hope is FDI will jump from $5 billon in 2004 and $6 billon in 2005 to $10 billon in 2006. While it is still sixth of 2005 FDI to China, at least it's progress at attracting investments that matter.

But the final test, at least for the next few years is upon us - infrastructure policy, especially airports. While construction of the truly international airport from scratch started in Hyderabad in Jan 2006, PM Singh privatized Mumbai and Delhi airports and got bids to spend Rs 24 billion (half billion dollars) each over the next five years to improve the airports. PM's allies the Communists (working for who know who) have come out in full force and unleashed their affiliated labour mafia on the airports.

But the PM is pushing back! He is activating aviation laws to punish strikers and says he will meet with the Communists but won't role back the privatization plan.

Finally the prime minister got some spin to follow up the empty talk for two years. PM Singh's Thatcher moment is here and he better stand firm for the sake of the India's future.

Update Feb 3, 2006: And filth builds up at the airports. While the strikers offer every dumb excuse - from "we have alternative proposals" to national security (huh, Commies interested in national security?), PM Singh says there will be no question of roll back. Way to go!!!

Update Feb 4, 2006: The protest cracked!!! I can't believe PM Singh pulled it off!! In less than three days? Wow!!! Is Manmohan Singh the new Iron Man of India?

And keep that reform ball rolling, less it comes to a full stop again.

Update Feb 8 2006: Infosys CEO, Nandan Nilekani, agrees with me. Touche! Touche!