The economy is in free fall. The rupee is finding new lows, the Sensex is bleeding, inflation shows no sign of receding and industrial output is dipping dangerously. That the situation is gloomy is an understatement. It calls for hard decisions and bold initiatives. It is pointless now to blame the government for the drift. The whole political class has turned risk-averse.
“We were not eating lizards when we didn’t have foreign direct investments.” This was Finance Minister Pranab Mukherjee speaking in Parliament during the presentation of the Finance Bill the other day. There are many ways to look at the statement.
First, it is a subtle rejection of the theory emphasising the centrality of FDIs in the country’s economic well-being; second, it sends out the message that the government is in no tearing hurry to welcome and embrace foreign investors; and third, the finance minister won’t allow the FDI economics to get mixed up with his or his party’s politics. If there were sighs of disappointment in many influential circles after the statement, it is understandable.
Troubled economy. Image courtesy PIB
But Mukherjee is no minnow in economic matters. He is also a politician of terrific standing. When he decides to sacrifice economy for politics, you realise things have gone horribly wrong. Add an unrelated development—the near unanimous decision of parliamentarians to drop cartoons of leaders from NCERT books—to the scenario. The picture becomes clearer.
In private, all leaders would admit they have nothing against cartoons — as public figures they are used to being lampooned, treated as subject to satires and even ridiculed openly. But in public, neither any party nor any leader would take a position on the issue. They would be happy to go with the swing of the popular mood rather than take a principled position.
The country needs a second wave of reforms to survive the looming economic crisis. But talk of FDI in retail and important economic restructuring, the knives are out immediately. A political party has to be incredibly foolish to stick its neck out and think brave against the current. It would be politically suicidal.
Fragmentation of the polity and the consequent sense of insecurity among parties is certainly the biggest reason why the leaders have decided to go on the defensive. If the general elections of 2004 and 2009 were a clear indication—in contrasting ways, of course—that big reformist ideas don’t fetch votes, the emergence of regional straps with limited local agendas have ensured that populism becomes a legitimate alternative to hard policy moves.
Let’s face it. Reforms would make no headway in India in the absence of a political consensus. Governments—it is UPA this time, it could be NDA next—would refuse to make any bold moves on the economic front or even in social legislation in the absence of broad agreement among the political players.
The situation right now makes the country nobody’s responsibility. The government can wash its hands of critical decisions arguing no other party is interested. It can go ahead with illiberal moves such as the deletion of cartoons or banning of a book citing popular demand. At the end of the day the government in power is a political party which has to go back to the electorate for votes. It is obvious that it won’t risk displeasing sentiments. Of course, it would hate to offer a handle to the rivals to exploit against it. It can afford the rupee to fall but not lose elections.
The trend bears ominous signs for the country. Forget the economy, the country’s liberal fabric and tolerant ethos will be under threat if it continues unabated. It will end up damaging the rich intellectual culture of the country.
The slide is visible already. The 60th anniversary of the first sitting of Parliament should have been an occasion for the political class to introspect and arrest it. Unfortunately, the effort was conspicuous by its absence.
