Like an itinerant seller of economic dreams, the UPA government has been trying very hard to persuade the people that it stands for ‘reforms’. No less than the Congress president Sonia Gandhi and her son Rahul Gandhi have stepped out from their sheltered cocoon to speak up in defence of FDI in multi-brand retail. Of course, in their public comments, they have been presenting the FDI-in-retail proposal, which has faced enormous pushback from virtually the entire opposition, as intended to benefit farmers.
Prime Minister Manmohan Singh, too, uncharacteristically broke his silence to give a televised address to the people last fortnight to explain the rationale for the recent policy initiatives — from raising the price of diesel to capping the number of subsidised LPG cylinders to permitting FDI in retail and civil aviation and so on. His trusty Finance Minister P Chidambaram has been filling the television airwaves with daily doses of “big bang reforms” .
Yet, nobody seems to be buying the Congress story that it is advancing much-needed economic reforms. Virtually no party other than the Congress, and that includes the party’s own allies in government, have come out in defence of these policy initiatives. On the other hand, virtually every party – including parties like the DMK that are part of the UPA and others like the Samajwadi Party, which are supporting it from the outside — have publicly opposed the initiatives. And of course, the Trinamool Congress has actually walked out of the UPA coalition to emphasise its opposition to the proposals, which it has branded “anti-people.”
About the only constituency of people who have welcomed the recent moves are captains of industry, and stock market investors — although even the latter group appears to have come around to the view that the announcement of FDI in the insurance and pension sectors may not be realised, given the arithmetic of Parliament.
But why is the Congress having a hard time selling the ‘reforms’ narrative, even two decades after they were first introduced in 1991? Why is it that despite the visible economic advances that India has made since then, and the fact that the constituency of middle-income groups in India has expanded enormously in these two decades, the Congress storyline on ‘reforms’ has no takers?
This is all the more striking when one considers the contrast with 1991: on that occasion, the ‘shock treatment’ of the first wave of reforms and liberalisation was much more severe, and yet the word ‘reforms’ wasn’t considered a dirty word in the way it is today.
One critical consideration is that the ‘reforms’ — as they have been advanced by the Congress today — aren’t really reforms at all.
As Firstpost editor R Jagannathan noted earlier, “the reforms now being thought of have little to do with the kind of things India nearly needs. A reform can be defined as something that will fundamentally change the game, improving economic efficiencies, improving governance and the delivery of government services, enhancing the autonomy of economic agents, and reducing wastage in administration — among many other things.”
On that count, the initiatives that have been billed as ‘big bang reforms’ by the Congress amount to mere tinkering on the margins; they are not game-changers. Merely rolling out the red carpet for FDI investment (which may not even come unless real ‘reforms’ in the business licensing and anti-corruption space aren’t addressed) does not qualify as ‘reforms’.
In his television address, Manmohan Singh wailed that the Opposition parties were resorting to scare-mongering and populist rhetoric, and that even the harsh decisions his government had been compelled to take — such as the diesel price hike and the cap on subsidised LPG — were required to avert the prospect of a repeat of the 1991 economic crisis.
Nowhere has there been even the faintest acknowledgement that it was the UPA government that has since 2004 shifted the focus and the economic discourse away from economic growth and effectively made ‘reforms’ an unmentionable word.
The UPA, headed by the Congress, won the election in 2004 on the back of its ‘Inclusive Growth’ slogan (as a contrast to the NDA’s ‘Shining Indiá’ message, intended to showcase the success of economic reforms), but took it to absurd lengths by painting a story of India that appeared calculated to make middle-class Indians feel guilty about doing well.
Shekhar Gupta highlights the change that the Congress has wrought in the popular narrative since about the turn of the century. “In the wake of the Kargil turnaround, the new generation of Indians dumped (the) negative, defeatist, self-pitying, kasam tumhari main ro padungi attitude.” That new mood uplifted economic growth and earned global respect for the Indian passport — and contributed to a renaissance that touched everything from art to personal finance. But, he recalls, “it was at this precise point that the Congress decided to change the script, telling the people of India how badly off they were and how they had been betrayed by their rulers all these decades. So badly, that two Indias had come into being, one shining and one declining.”
If you spend eight years rubbishing ‘reforms’ as being “anti-poor”, in the way that the Congress effectively did from 2004, how can you hope to persuade anyone that you’re serious about what passes for ‘reforms’ today? Particularly since, as has been sufficiently well-chronicled, the Çongress’ new-found economic zeal seems intended solely to deflect attention away from the monumental corruption scandals that have happened under its watch.
Getting excited about these moves is, as this columnist observes, “similar to the crowd cheering a batsman with a strike rate of 30 hitting a six in the 46th over after the asking rate had climbed to 20 per over for the remaining five overs.”
The party faithful may cheer and applaud, but the paying public aren’t buying any of this. Particularly when what passes for ‘reforms’ haven’t yet made a material difference to the lives of anyone.