Dr Dolittle's Guide to Reviving the Economy's 'Animal Spirits'

So Manmohan Singh, who seemed to be sleepwalking through much of UPA-2, wants to “revive the animal spirits of the economy” and “reverse the climate of pessimism” in the country.

We are all for reviving animal spirits, but we assume that Dr Dolittle Singh’s comments relate to the hibernating political economy. But our advice to the good PM-cum-FM is this: be careful what you wish for, for your wish may be granted. We believe that there are several animals whose spirits need dousing rather than reviving.

On a plain reading of Singh’s exhortations to the ministry of finance, we presume that the animals he really wants to revive are the Duck and the Bull - duck as in Scrooge McDuck, the Walt Disney character who’s the richest in the world - and the stock market bull.

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The business Scrooges of the world, and their counterparts in India, are unwilling to open their purses and invest in revival because of the prevailing climate of pessimism, but in trying to reverse it, Manmohan Singh has to be careful not to revive several other animals lying in wait to attack him.

Here are a few animals we would like to caution Dr Singh about when he starts prodding the embers of mild reform.

One, he should do nothing to wake up the Dragon of inflation, even though energy reforms may stoke a bit of it. In particular, he should steer clear of trying to stimulate the economy with yet another stimulus package. This will enrage the Dragon.

Two, he should be wary of irritating the Gujarat ka Sher. He is raring to have a go for Manmohan’s job in two years, and so any political red-rag that wakes up the Lion of Gujarat can be inimical to UPA’s interests.

Three, he has to pussyfoot around the wounded Bengal Tigress. Waking up her animal spirits will mean premature mid-term polls. The best way to do this is to start discussions on a Bengal bait package to keep the Tigress interested.

[caption id=“attachment_360184” align=“alignleft” width=“380” caption=“We are all for reviving animal spirits, but we assume that Dr Dolittle Singh’s comments relate to the hibernating political economy. AugoFel/Flickr”]  [/caption]

Four, Dr Dolittle has to play the right kind of games with the Samajwadi Fox and the BSP Elephant. Mulayam Singh, that wily old poker player, may have foxed the Bengal Tigress with fast footwork on the presidential poll, but playing tick-tack-toe with him could be injurious to the UPA’s simultaneous dance with Mayawati’s Elephant. Reviving one animal’s spirits means arousing the attacking instincts of the other. So watch out.

Five, the Bull is the obvious animal to court in these pessimistic times, but any neo-liberal policies will be like waving the red flag to the Leftist bulls in the anti-reform shop.

Six, to keep the budget on an even keel, Dr Dolittle has to keep the Congress party and Sonia Gandhi’s NAC buddies from Wolfing down the subsidies. Or else the Wolf will be at the door of a bankrupt treasury.

Seven, Manmohan has get the Dove activated at the Reserve Bank. Right now, Governor D Subbarao’s Eagle Eyes are on the inflation numbers. The PM has to get inflation down so that the Dove in Dr Subbarao surfaces once more. At the last credit policy, Dr Subbarao was not in favour of touching the Holy Cow called Repo.

Eight, the key to revival is to get basic things right in terms of infrastructure projects in coal and power - among other things. They require telling the Climate Hawks and Green Pandas of the ministry of environment and forests to stop playing spoilsport on new coal mining and power projects - at least till the rest of the economy’s animal spirits start reviving.

Nine, the PM needs to shoo off the Boa Constrictor called Government Spending off the premises for a while. The government swallows the bulk of the tax revenues generated to feed its own bureaucracy and generate waste. Manmohan Singh needs to rein in all kinds of non-capital spending in government till the economy is out of the woods.

Ten, the one animal that Dr Singh should try and pack off immediately is the Bear. He’s been ravaging the stock markets and investor sentiments off and on, and the sooner we kill its animal spirits, the better it would be for the economy.

Most important, Dr Singh, it is important to ensure that your party boss does not sell you a Pig in a Poke in the form of electoral logic. Any more fooling around with the things that worked for you in 2008 - farm loan waivers, massive giveaways and freebies to the rural constituency - means the economy will go to the Dogs.

And the proverbial Cat will be set among the Pigeons.