On Wednesday,Prime Minister Manmohan Singh made a rare address to the Confederation of Indian Industry,reassuring them of an upturn,acknowledging that bureaucratic inertia and corruption were hampering plans. Today,Congress vice-president Rahul Gandhi will speak to the same gathering,publicly levelling with entrepreneurial India for the first time. Evidently,the UPAs top leadership is trying to convey the impression that India is open for business and undo over three years of sustained damage. But this intervention comes too late to substantially help the ruling coalition or the dispirited economy.
Despite being re-elected in a period of unprecedented economic optimism,UPA 2 doubled back on its own promise. The Congresss bad old instincts kicked in as it told itself and its voters that real India was elsewhere,that it was unremittingly abject and in need of extravagant assistance,that growth was besides the point. That patronising approach of agricultural debt waivers and rural employment schemes was shored up by a suspicion,even vilification,of entrepreneurial India,the very force that created the prosperity needed for these giveaways. Five years of growing at 8 per cent plus had accustomed businesses to make expansive plans,to hire more,to borrow,to upgrade assets and create bigger inventories in the expectation of healthy demand. Those hopes have been rudely dashed. Even as investment fled the country to more welcoming environs,key sectors shrank,manufacturing slowed,power plants were shut down and livelihoods were lost,the UPA continued to trip business up with policy inconsistencies and environmental red tape. Ministries contradicted each other,permissions were given and retracted. Land acquisition and infrastructure-creation became more and more challenging. The UPA behaved as though business was solely about enriching greedy capitalists,rather than creating wealth and jobs,hefting the economy upward. It refused to engage with business straightforwardly in clear daylight,preferring to speak to it in the shadows,perforce. After three years of that damaging and miserabilist approach,the UPAs new desire to champion reform and encourage investment doesnt quite cut it.
At this moment,as economic vital statistics hover at critical levels and the general election looms closer,the UPA has no choice but to abandon its old politics. Its refusal to engage with and address the problems of entrepreneurial India has extracted great costs. The gestures of the last six months cannot reverse the distorted priorities of its term so far.