My Reply

5 decades of protecting the Tatas, Ambani's and Mallyas have increased inequality tremendously in this country. The people who had capital grew richer faster, while the state of the middle and lower classes improved marginally. While competition between Tata and Ambani, might have driven down prices (in telecom etc) we need more competition. Foreign employers would be a big egalitarian boost to India: the middle and lower class can get rich without making the established rich richer.

Mr Raghavan argues the case for Indian capital, as if Indian capital is shared equally by all it's citizens. The stark truth is, only the rich can afford to be entrepreneurs in today's 'liberalized' Indian economy. To really improve the state of the lower and middle classes, we need competition in labor markets. Only higher demand for labor can increase the wage-rate - that our-own Indian entrepreneurs have suppressed for decades.

We need foreign employers, foreign capital, foreign businesses - the more the better. No doubt, the competition in product markets will drive down prices and improve product standards, but the competition in labor markets would truly uplift the classes, and give a big boost of equality to India.

It is easy to see why the business elite argue for protection from foreign capital. It would overwhelm them. Whereas if the masses knew, how the government hinders foreign employers from providing them with more and better-paying jobs; while they spend days in the sun looking for one, they’d be seriously rattled.

The rhetoric of protection is just rhetoric: all they are really protecting is the system of inequality in India. The elites, who are served by the present system of inequality, don’t want it go – not only does it guarantee them low labour costs but also protection from competition. They also know a wealth differential has benefits in India – and these benefits are not only financial. They’d do everything to preserve the status quo.

Above is my reply to Raghavan's rant:
http://ia.rediff.com/money/2006/jan/28guest2.htm?q=tp&file=.htm