Manmohan, not a reformer anymore
Opinions will differ on the merits of Pranab Mukherjee’s budget. There will be those who will say that the finance minister has done the best job possible given how difficult the economic situation is. And there will be others who will argue that he has produced a pedestrian budget that is lacking in imagination.
But regardless of which view you incline to, there is one area on which there can be no disagreement: this is not a budget that advocates or encourages reform.
If you watched the endless television debates on Election Day, the one thing that all the commentators and industry representatives agreed on was that the finance minister had abandoned the path of liberalisation and had shown no inclination to reform the economy.
I have no problems with the finance minister’s refusal to jog down the path of liberalisation. It is no secret that there are divisions within the Congress on the virtues of liberalisation and it is even clearer that the Congress’ allies will oppose any move to liberalise the economy. So, perhaps the finance minister was simply sticking to his mandate.
But my question goes beyond the budget and takes us back several years in time.
If this government has no interest in reform and if the Prime Minister has abandoned the Great Liberaliser positioning that made him famous in the 1990s, then why did the UPA have to part ways with the Left?
You will remember the old argument: during UPA I, Manmohan Singh claimed that he was being prevented from reforming the economy because of Prakash Karat’s intransigence. There were frequent skirmishes over relatively minor issues till a big battle was fought over the Indo-US nuclear deal. Manmohan Singh said that the deal would transform India and that billions of dollars of foreign investment would flow into our country. The Left said that nothing of the sort would happen, that India would enter into an unnecessary strategic alliance with the US and that, in any case, this alliance would prove to be worthless once George Bush left the White House.
Manmohan Singh told Sonia Gandhi that he would resign as Prime Minister unless the government signed the deal. So, a reluctant Congress backed the Prime Minister and the Left duly pulled out. The government survived a vote of confidence in circumstances that are still controversial and the allegation that MPs were bribed to vote in support of the Congress dented Manmohan Singh’s reputation for clean governance.
The basic difference between UPA I and UPA II has been the absence of the Left. You would have thought that with the Left gone, the Prime Minister would now implement all the reforms he said he had been prevented from introducing by Prakash Karat.
In fact, nothing of the sort has happened. There have been fewer reforms in UPA II than during the life of UPA I.
Partly, this is because of the intransigence of some UPA constituents.
When it comes to reform, Mamata Banerjee has proved to be as regressive as Prakash Karat – and a lot less logical. But mostly, it is because the Prime Minister and his party themselves have shown no great desire to liberalise further. They have been content to maintain the status quo.
Meanwhile, in the absence of the Left, several other things have changed. Though the Congress has more MPs in this Parliament than it did in the last Lok Sabha, UPA II seems a lot shakier than UPA I and there is some doubt over whether the government will complete its term. The urban middle-class constituency that the Prime Minister had assiduously cultivated during UPA I has been distracted by Anna Hazare and other such movements. You can argue about how much support Anna Hazare really commands within the middle class. But you cannot dispute that Manmohan Singh is no longer the middle class hero he was during UPA I.
Some of this has to do with the corruption scandals. But some of it also has to do with the decline in his personal credibility. He told us that the nuclear deal would change everything. It was so important that he staked the survival of his government on it. In fact, it has changed nothing. Manmohan Singh told us that his hands were tied by the Left. Once he got rid of these troublesome allies, he would transform the economy. But he has done damn all.
So, when I watch all the debates over the status quo nature of the budget, my mind wanders back to those tense days before the confidence motion when Manmohan Singh took on Prakash Karat and pushed his party into supporting him.
Looking back now, I have to wonder: was it worth it? Or did Manmohan Singh just fool all of us and perhaps, even himself?