By Kalyani Shankar
In the sixties and seventies the late Prime Minister Indira Gandhi used to defend herself from any attack by blaming the foreign hand. Similarly, ever since the UPA 2 came back in 2009, Prime Minister Manmohan Singh has blamed the “coalition compulsions” to brush off policy paralysis. Hurt by the Prime Minister’s repeated allegation of the allies blocking the decisions, the NCP chief Sharad Pawar even wrote a protest letter claiming his party had never created any problems. Recently Finance minister Pranab Mukherjee too has cited two major compulsions facing the government- the global slowdown and the need to accept coalition realities for political survival.
So what is wrong if the chief economic adviser to the government Kaushik Basu articulated the same thing in Washington in his lecture to the Carnegie Foundation? What were the objections to Basu’s observations on the state of Indian economy except that it was said in a foreign soil?
After all what did Basu say? He said there was a slow down of the economy, which is true. The GDP growth is a proof of this. Secondly, he said the series of corruption and scams is having its own impact on the psyche of the bureaucracy, who is not willing to take risks. This is also true. Thirdly, Basu said reforms have slowed down because of coalition compulsions. From prime minister downwards the excuse for the slow pace of reforms is the coalition compulsions. Pension, insurance, banking bills are all pending. Capital market issues and other matters affecting the corporate sector are languishing without attention. Fourthly the slow down is due to inflation and drop in agricultural production, and official figures speak for themselves. Fifthly, Basu has predicted that post 2014, there could be a rush of reforms and after 2015 India would be one of the “fastest growing economies of the world”. No one can claim that in the next two years India is going to witness the second generation reforms in a quick pace. Perhaps the government is rather agitated that Basu had observed reforms were likely to remain on hold till 2014. If they were baseless, there is a simple way of proving him wrong instead of frowning at him.
Mr. Basu cannot be faulted on most of the observations he made in Washington. Being an academic, he was frank in airing his opinion. In any case he is already packing up his bags to go back to Cornell University. The Prime Minister himself has strengthened the argument of Basu that decisions are not taken speedily by the officers. Otherwise why should he tell them on the Civil Service day last week that “the civil servants in our country should fight the tendency of not taking decisions because of the fear that things might go wrong and they might be penalized for that.” Why did he assure them that there would be no witch-hunt in the name of fighting corruption? All these prove that Basu was certainly not far off the mark.
Actually the real problem lies elsewhere. No doubt the partners in the UPA 2 flex their muscles to demonstrate their political clout to impress upon their local constituents. Their attitude does impair the quality and pace of decision-making. P.V. Narasimha Rao who was leading a minority government in the nineties or Vajpayee who was presiding over a 24-party coalition were able to run the government and also pursue reforms. Even prime ministers like Deve Gowda and I.K. Gujral did not blame the coalition compulsions and they were able to take some tough decisions.
The real problem is that there is no cohesion within the UPA 2. The issue is not coalition politics but management of coalition partners. On the one hand the UPA allies support the survival of the government but on the other apply breaks on economic reforms little realizing what affects the UPA 2 will also affect them when elections come. Allies like the TMC and DMK put pressure on the government on issues like the FDI in multi brand retail, pension reforms and land acquisition bill besides foreign policy issues like the vote against Sri Lanka in the UN just to have an upper hand in state politics. West Bengal chief minister Mamata Banerjee has practically taken over the left agenda on economic reforms. The DMK’s stand depends on what the AIADMK does.
The Congress and the BJP agree on many economic issues and together they have the numbers to push many bills but it is politics, which is not allowing them to do so. The left parties are opposed to the economic policy of the government. The JD(U) wants fiscal corrective measures. The others have their own axe to grind.
In such a situation, how does the government hope to push through some of the urgent reforms? The first thing the government managers have to do is to get the allies on board on important issues through persuasion. Consensus building is a great art and the Congress should try to master it rather than giving a feeling to the allies that the Congress would not consult them. The second is to get the support of parties like the SP, BSP and some smaller parties to make up the number required for the passage of any bill. The third is to have a proper coordination mechanism with the opposition parties to bring them on board. In the past several important issues had been resolved in this manner. Instead of blaming the coalition politics, the strategists should find ways and means to overcome the difficulties. After all, the coalition era has come to stay with the polity getting more and more fractured and there is no point in blaming coalition compulsions for policy paralysis. (IPA Service)
