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HindustanTimes Mon,21 Apr 2014
Paralysis as policy
Karan Thapar
September 08, 2012
First Published: 22:24 IST(8/9/2012)
Last Updated: 22:43 IST(8/9/2012)

More than its numbers in Parliament, what confers credibility on a government is the belief it will act, forthrightly and decisively, and stand by its decisions. Unfortunately, you can no longer say that with any real confidence of Manmohan Singh’s UPA 2. Whether it’s because of circumstances or its own disinclination, no one has any expectations of this government. At the most it will limp to the finishing line and it won’t be a heroic sight. That’s why the situation we face is not just depressing but deeply disillusioning.

Let’s take the economy as an example to illustrate my point. Growth and foreign direct investment (FDI) have slumped, reforms have stalled, inflation is stubbornly high, the fiscal and current account deficits are ballooning whilst investor confidence has evaporated. On each of these fronts the government needs to act, and quickly. But will it? Or, if you prefer, can it? Frankly, I doubt it.

First, the hurdles that have checked reforms remain and are unlikely to disappear. Mamata Banerjee’s opposition to FDI in retail and aviation continues and now we have to add Mulayam Singh’s disinclination. The BJP’s insistence that insurance, pension and banking reforms can only happen in accordance with the Parliamentary Standing Committee’s advice is unchanged. The Goods and Services Tax and Direct Tax Code are effectively postponed and who knows for how long.

Second, steps that can tackle the fiscal deficit, such as cutting subsidies and expenditure or raising fuel and LPG prices, have been and continue to be opposed by Sonia Gandhi, not to mention the UPA allies. I can’t see a weak and, worse, unpopular government biting this bullet.

Third, the Shome Committee may succeed in postponing General Anti-Avoidance Rules but reversing the retrospective tax amendments, which have shaken, if not shattered,  international confidence in India as a prime investment destination, needs legislative sanction and may have to wait for budget 2013 to be sneaked through. That’s six more months!

Finally, with 11 state elections and a national election between now and May 2014, the case for cautious politics is bound to trump the need for radical reform. In these circumstances, the claim this government will push ahead with reform is a bit like expecting turkeys to vote for an early Christmas!

Now, with Parliament stalled, what’s true of the government’s inability to handle the economy could also apply to every other field that requires legislative intervention. Even where executive action would suffice, the government’s internal differences or its disinclination to take risks is likely to preclude decisive action. And with each passing month, as, first, elections in Gujarat and Himachal loom, then Madhya Pradesh, Rajasthan and Delhi and, finally, the big one in May 2014, the reluctance or the refusal to act will grow. Hugely and irresistibly.

So is an early election the best solution? Normally it would be. That’s what saved Britain in 1979, when a similar political paralysis and disillusionment was dragging the country down. But, sadly, it’s unlikely to be of help in our case. Because, unlike Britain, an election will only produce a more fractured Parliament with even less prospect of clear and forceful action. We don’t have a Thatcher waiting in the wings. We have Frankenstein!

The only hope is if, despite everything, Sonia Gandhi and Manmohan Singh can deliver or, if they don’t or can’t or won’t, we bring the BJP back in sufficient numbers to do so. But, then, what about Narendra Modi?

I wonder if UPA 2 realises what they’ve done to our future?

(Views expressed by the author are personal)


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