Driving reforms process, Manmohan is no more a pauper

Suddenly, the prime minister is walking with a spring in his step, even as he turned 80 two days ago. You can see him almost sprint from one point to the next, unlike the last many months when he seemed to walk around in a daze, and his body language had signalled only fatigue. 

The turning point came when he reportedly conveyed to Sonia Gandhi that it would be very difficult for him to continue as PM unless he could move towards tough economic measures, and take steps to invite investment into the country or India’s growth story would be a thing of the past.

Dr Manmohan Singh, who had been hailed as the father of economic reforms in India, suddenly developed a backbone, when he took this step, stung by the criticism of him in the western media — Time magazine and Washington Post — that he was an “underachiever”. The criticism of his failure to move ahead on the reform agenda was also implicit in the downgrading of India by international rating agencies and the devaluation of the rupee against the dollar.

He felt his reputation had been besmirched, thanks to worldwide criticism, and with the opposition holding him responsible for cronyism in the allocation of captive coal blocks, when he was coal minister during UPA-I. If he could not go ahead with certain economic measures, he would like to be relieved of his responsibilities, he is believed to have indicated to the Congress president.

Before he spoke to the Congress president, it is said, he had sounded out Sharad Pawar and P Chidambaram about what he proposed to do. It was the PM — backed by the FM — who reportedly convinced Sonia Gandhi about the need to go forward and open up the economy further to foreign capital and undertake “reforms” that had been hanging fire, so as to invite investment into the country and effect fiscal consolidation.

The usually-cautious Sonia Gandhi reportedly saw merit in putting new initiatives into place, so as to wrest the initiative back in the hands of the Congress, which had sunk into a morass, only reacting to allegations which were hurled at the party, without let.
As it is, Sonia Gandhi had instructed her party MPs to go on the offensive and give it back as good as they got from the Opposition, and she had compelled LK Advani to take back his words in the Lok Sabha when he had dubbed the UPA government as illegitimate.
Though the Congress party has traditionally represented a mix of the Left and the Right opinion, and Sonia Gandhi herself has been quite careful about preserving the left of centre image of the Congress, and had encouraged measures like the loan waiver, MNREGA and RTI in UPA-I, she decided to stand behind the PM.

It all started ironically with the exit of Pranab Mukherjee to the Rashtrapati Bhavan, when the PM himself took charge of the finance ministry and on Day One itself there was frenetic activity as he went into a huddle with top officials on the current state off affairs. When P Chidambaram moved into finance a month later — he too is believed to have told colleagues that he was taken aback by the state of affairs in North Block — Dr Manmohan Singh had a powerful backer for taking the tough decisions he wanted to.  

The government, backed by the party, now plans to press ahead with the reform measures the PM has in mind, including power reforms, expeditiously — they have been brought before the Congress Working Committee and the UPA’s coordination committee for endorsement — and then unravel some of its populist measures by year end, like the Food Security Bill, and the constitution of a universal Health Mission, so that it can get ready for an election any time. The party managers are not unmindful of the fact that though the government has the requisite numbers at the moment, with the outside support of the SP and the BSP, accidents can always occur.

Though Congress leaders are quick to discount this, there is a view that some in the government wanted Mamata Banerjee to react the way she did and pull the plug. Had she remained in government, she would have resisted at every step the “big bang” reforms, which the PM wants now to pursue at “all costs”. In June this year, the Pension Fund Regulatory Development Authority Bill, 2011, which envisages private sector and foreign investment in the pension sector, was listed to come before the cabinet, but it was withdrawn at the last moment because of Mamata’s opposition. It is not without interest that the government decided to bite the bullet with FDI in multi-brand retail, knowing that it was like a red rag to Mamata, instead of starting with the less controversial measures which might have been more  acceptable to her, to begin with.

Without going into the pros and cons here of the economic decisions recently undertaken, like FDI in retail or diesel price hike, and whether or not they will yield political dividends, with the Congress fully backing the government and going on the offensive — ministers are planning to fan out into the states in the coming weeks — and with the PM and FM moving in step, the government seems to have shed its wishy-washyness overnight. After a long time,  it is setting the agenda and determining the political discourse — Coalgate is suddenly on the back-burner, and instead it is the “reforms” that have become the hot topic of discussion. “Singh” may not feel like a “King” yet, but he is not looking like a pauper any longer.
 

The writer is a political and social commentator