All is not lost for the UPA-II

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Amulya Ganguli | 24 Sep, 2012
Every dark cloud has a silver lining. In the present political scenario in India, at least three such streaks of light can be discerned. One is that the government is not in immediate danger. It may not last till 2014. But the moment of its fall will not be all that politically disadvantageous if the government's present overdrive on reforms revives the "animal spirits" in the economy, as Prime Minister Manmohan Singh has promised. In that event, the economic buoyancy can enable it to cross the electoral Rubicon.

Secondly, what is of considerable significance is that for the first time in the eight years of UPA-1 and UPA-2, the government and the Congress party are on the same page on reforms. For reasons which will be mentioned later, the suspected differences between the "neo-liberal" prime minister and the "socialist" party chief have disappeared. As is already evident, this unity of perception has marked the end of the earlier policy paralysis.

Thirdly, for all the bluster of the opposition parties, they remain as disunited as ever. To make matters worse, a fresh dose of uncertainty has been introduced in their camp by the sudden arousal of Mulayam Singh Yadav's prime ministerial ambition. So, now, there are at least five contenders for the coveted post in the opposition's ranks - Mulayam Singh Yadav, Narendra Modi, Sushma Swaraj, Nitish Kumar and that never-say-die aspirant, L.K. Advani.

What this means is that the opposition's eagerness for an early election will be tempered by uneasiness about the unseemly scramble for the top post which the announcement will entail. If anything, this jostling cannot but give breathing space to the Congress.

To avail itself of this opportunity, the Congress will not only have to push ahead vigorously with the reforms but also explain in great detail their rationale, which the prime minister did in his address to the nation on Friday night where he sought people's support for the "hard decisions" ahead. The reason for Manmohan Singh and his band of reformers like Finance Minister P.Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia to don the hats of teachers is that the party is facing opponents who are driven solely by blind dogma and a myopic outlook, which is oblivious of economic imperatives.

As much is evident from the acts of the Left, which withdrew support to the government on the nuclear deal in 2008, and the Trinamool Congress, which has now withdrawn support on the question of reforms.

While the Left was guided by an obsessive anti-Americanism, the Trinamool Congress is motivated by populist considerations where there is no room for the economic compulsions of balancing the budget or for the factors of globalisation which integrates the modern world.

Not only that, this blinkered vision is compounded by the Trinamool Congress's belief that it has to take up a position more to the left of the communists to outflank them, not least because the latter still has the support of 40 percent of the West Bengal voters. What is missing in these calculations, based on an inadequate appreciation of economic realities and the need for crafty political manoeuvres, is a broad national vision.

Only such clear-sightedness, which recognizes the limitations of the earlier experiments with a controlled economy, can lead to an understanding of the need for deregulation and the end of statism. But, if the Left purposefully rejects the new economic agenda for ideological reasons - although the CPI-M's Buddhadev Bhattacharjee realised the necessity of a change of line when he was West Bengal chief minister - parties like the Trinamool Congress are too preoccupied with their local political requirements to widen their outlook. It is the same with other regional outfits like the Samajwadi Party, the Janata Dal-United and the DMK.

The worst offender, however, is the Bharatiya Janata Party (BJP), which claims to be pro-reform. But an overwhelming desire to corner the Congress has made it turn against a measure like FDI in retail, which it had supported when in power. So, now, it has adopted the jargon of the Left to blame the "foreign hand" for the latest reforms, as Modi has done.

But there are signs of hope. While the Congress's allies like the Nationalist Congress Party (NCP) and the National Conference are pro-reform, a change of mood is evident in the Biju Janata Dal's decision to take a fresh look at FDI in retail. It is also known that there are two views in the Akali Dal on the issue with Punjab Deputy Chief Minister Sukhbir Singh Badal favouring it.

What is of vital importance, however, is the Congress's decision to shed its earlier hesitancy about reforms and stand fully behind Manmohan Singh. There is little doubt that it is the plummeting growth rate and dwindling investment which made the party realize that there is no other path than reforms.

* Amulya Ganguli is a political analyst. He can be reached at amulyaganguli@gmail.com
* The views expressed by the author in this article are his/ her own and do not necessarily reflect the views of SME Times.