Existing ports and airports, we will be told, are inadequate to handle the huge foreign trade. Domestic firms are too weak and FDI is the only possible salvation. Any delay in doing so, we will be warned, will take back India to 20th century. The same set will set forth figures to show that much of India's 'stagnation' was due to lack of liberalization in financial sector. We will be told how selected countries had progressed due to deregulated banking, finance and insurance without the restrictive oversight. This cannot be achieved without free flow of FDI in these sectors. We should have world class innovation in financial sector, insurance and banking.

The build-up will certainly be amplified by well-covered industry seminars, edit pieces and TV discussions. All this is no astrological predications. Anyone who is familiar with how this government works can foresee it. The only question is whether the Manmohan Singh government will take the new task with the same kind of commitment and zeal he had displayed in the case of the US-India nuclear deal. The pitch has already begun with the planning commission under Montek Singh Ahluwalia signalling the need for $1 trillion worth infrastructure in five years.

It all started in November last with a post-Lehman Barack Obama seeking our PM's help to salvage the battered US business, banks, financial companies and insurance by more widely opening India's doors for FDI. Soon Delhi realized that the US is dam serious about pushing its demands. Hence the anchorman in Yojana Bhavan worked out another detailed scheme to make the US demand less painful and unobtrusive. However, US treasury secretary Timothy Geithner who came to India this month made it straight and blunt. He said his visit to India was purely for pushing India to open up its door for US firms now in distress. The Obama administration takes the twin demands as a touchstone for future India-US relations.

It was with this objective that the US-India Financial and Economic Partnership Forum was launched on April 7. The treasury secretary said on record that while the Obama administration has been making earnest efforts to limit consumption in US and step up domestic savings, it also wanted other countries to step up their internal consumption and increase opportunities for the US corporate firms. He says: “The critical challenge as the US moves away from consumption financed by borrowing is that we want to see broader reform and changes outside (i.e. countries like India). This requires changes (in the economic policies of) the rest of the world.”

During his talks with Mukherjee, he set forth his demands without giving any scope for bargains or concessions. Geithner made clear that the UIFEPF will be charged with the task of fulfilling the US desire. Its next meeting will be held in Washington with Mukherjee and Geithner following up the progress in opening up infrastructure and banking, insurance and financial sectors for US FDI. In a joint statement, the two leaders made the Forum will focus on three areas - all exclusively aimed at serving the US economic interests. The objectives are: macro-economic policy changes needed in India to accommodate US FDI; private infrastructure financing to India; and financial sector reform like removal of FDI cap.

When Yojana Bhawan quickly raised the infrastructure projection to $ 1 trillion and Mukherjee talked about $ 600 billion on offer, few at that time knew it was all part of this joint project. It is such lack of transparency that has led to scary rumours about the great Dhritarashtra hug. The skeptics included civil society activists, sections within the Congress party, Swadeshis and the hardened Left. The trust deficit is such that an old Swadeshi has speculated that Chidambaram's anti-Naxal zeal is primarily aimed at clearing the mineral rich tribal belt for foreign operators. Such speculations apart, very little is know about the actual details of the UIFEPF.

In the presence of Geithner, Mukherjee revealed that the first step in opening up infrastructure to foreigners will be to invite US investors to join India's 'asset building projects' worth $600 billion. Will this include roads, highways, dedicated corridors, airports, ports, power and mines? Will the 'asset building' be like India and China acquiring large tracts in African countries in a neo-colonial fashion? Will they be built, owned and operated by foreigners? Will other countries be prevented from the bid under 'security' clause? Civil rights and Swadeshis are very bitter about putting sensitive areas under foreigners' control. During George Bush, a Saudi firm had bought the company running US ports. But even the liberal Bush had scrapped the deal in the name of security.

Is there an undertaking to grand infrastructure projects to US firms directly without global bids? In that case, will market rates be applied and make it competitive? What about per unit cost? Some cite the case of a defence deal. There have been intense US pressures to give the $ 12 billion multi-role fighter contract to Lockheed Martin and Boing. But A.K. Antony had insisted on global bid. Critics fear the government will also be obliged to pass special bills - like nuclear liability bill - for sovereign protection to the infrastructure creators. These are the kind of concerns over Mukherjee's April 7 offer to Geithner.

Will the new deals also meet the pathetic fate of 1990's Enron power project? Those were the days when the same set of people in government held road shows in US and Europe to invite foreign infrastructure projects. Enron was the lone catch, that too at more than the double the per unit cost of power. Finally when Enron collapsed, Indian tax payers suffered heavily to take over the sinking plant and revive it. This time the government wing will be more hard pressed to counter the growing public sentiment. A minister in the Vajpayee government was indignant: The US did not give us any special market access in capital, job, or exports. Why should we do it now at the cost of our own interests? What we overlook is that public opinion in India is often formed beyond and in spite of the best orchestrated media campaign. (IPA Service)