The animal Manmohan must tame first: it's Congress

It’s now or never for Manmohan Singh. After a long hiatus, he is in full control of his favourite turf: the country’s economy. And he has to deliver and deliver well if he is serious about redeeming himself, both as a political player and an economist. On his success depends the possibility of a turnaround in the sagging political fortunes of the battered UPA and the Congress.

At the core of it would be how deft he proves at balancing politics and economics.

Forget the doomsday theories, gloomy headlines and the credit rating downgrades by international agencies. The country’s economy is nowhere as bad as it was in 1991. Despite all its perceived weaknesses, India is still among the better performing economies of the world. In 2012, the prime minister does not need to effect a drastic overhaul or an orbital shift of the economy. He only needs to go for course corrections and bring discipline back in the economy.[caption id=“attachment_360645” align=“alignleft” width=“380” caption=“Time to boost economy. Image courtesy PIB”] [/caption]

But things are not too rosy either. All indicators point to the fact that the economy is in a free fall and unless the trend is arrested soon, the consequences would be disastrous. The prime minister-cum-finance minister can no more blame the sorry state of affairs on global developments; it has been done to death. He would be aware that the government which he heads is primarily responsible for the mess, courtesy policy paralysis, reckless social spending, short-sighted decisions and muddled thinking on economic matters.

He has to undo the damage brought upon by his own government. And speed is of critical value. If he really wants to unleash the ‘animal spirit in the economy’ there are quite a few animals he will need to tame. This has to start from home – the Congress. His fundamental challenge would be to separate the country’s economy from its politics, from the politics of his own party to be more precise.

The Congress leadership appears to be convinced that good economics does not equal good politics. So if one has to be sacrificed for the other, it is economics that has to be dumped. After its victory in 2004, the party has become aggressively populist in its political agenda and has consciously pushed the larger economic interest of the country to the margins. After 2009, it was convinced that good economics does make no sense at all.

A vocal section in the party believes that economic reforms don’t pay electoral dividends; it only fetches positive headlines which are of little practical use when it comes to elections. Politically, reforms mean creating pockets of resistance in every space and thus alienation of people from the party. Of course, there are political rivals to make capital of the general feeling of insecurity about reforms among people. These made running coalitions difficult too.

Between 2004 till now, the UPA and the Congress have been busy sacrificing economics for politics. Interestingly, Manmohan Singh, the ‘reformist’ prime minister, who is still looked upon with some awe by global leaders, has been presiding over the gradual fall of the economy over the last eight years. The consequences are showing now. But now that he is in charge, he cannot shift the blame on others. He has to let his own animal instincts take over.

Of course, this is easier said than done. Will he be able to convince his party leadership, which seems consumed by do-goodism and political insecurity, to change? It would require immense courage from Manmohan to change the defensive mindset. The prime minister, unfortunately, seems to be too meek to assert himself. His success would rest a great deal on how he manages to convey to a majority of Congress leaders and UPA allies that good economics can be good politics too.

Manmohan does not have too much time on hand. He has to decide whether he wants to make the economy safe or his own job safe. He can push the reforms agenda or play the ‘safe’ politician, pushing the country into a further economic crisis. Like we have mentioned earlier, the economy is not beyond repair even now. He can still manage to be a successful economist and a successful politician at the same time.

Is he game for the challenge?