Again Cong can’t decide its stand on reforms

The irony of the debate in the Congress is that the chestbeaters in Delhi seem to be at odds with their chief ministers, all of whom have pragmatically bowed to the relentless logic of empty coffers to push ahead with the reforms process. Anti-reformers may cry themselves hoarse here over public sector disinvestment, subsidy cuts and the great MNC takeover, but the CMs of the Congress-ruled Karnataka, Madhya Pradesh, Rajasthan and Maharashtra are not listening.

In fact, the steps taken by the governments in these states in recent months underline the hollowness of the protestations that continue to emanate from the Congress almost a decade after Narasimha Rao and Manmohan Singh set economic liberalisation in motion. Karnataka, for instance, has set up a privatisation commission to look into disinvestment of the public sector.

Both Rajasthan and Karnataka have taken steps for the eventual privatisation of the power industry. Karnataka has called a global investors meet on June 5 to solicit foreign investment. Rajasthan is scheduling a similar meet for September.

Madhya Pradesh recently retrenched 40,000 daily wagers on government rolls, for which Chief Minister Digvijay Singh is facing flak from within his own party and from the BJP’s chief ministerial aspirant, Uma Bharti. She has threatened to start a hunger strike unless he reinstates and regularises these employees. Rajasthan CM Ashok Gehlot held out through a 70-day long strike by government employees in the state and succeeded in breaking the strike.

All four State Governments are negotiating huge loans from either the World Bank or the Asian Development Bank. Interestingly, the presentation made by Maharashtra CM Vilasrao Deshmukh to a World Bank team three weeks ago was on the same lines as the one made by leading reformist Chandrababu Naidu when he sought a World Bank loan for Andhra Pradesh four years ago. It included the standard promises for economic restructuring including reducing subsidies, privatising power and closing loss-making public sector companies.

“Congress Chief Ministers are on a different wavelength to their seniorsin Delhi. Not one has reversed the reforms process. In fact, each one wants to take it forward. They have to govern and in their present bankrupt state, they realise that they have to take the reforms route,” says Jairam Ramesh, member of the Congress party’s economic cell.

According to Rakesh Mohan, Director General, National Council of Applied Economic Research, the very premise of the current debate on reforms is wrong. “The question is not whether reforms are anti-poor and pro-rich. State governments are no longer investing in health, education, roads, clean drinking water, etc because they simply don’t have the money. The issue today is how to charge enough from those who use services so that governments can get revenue to invest in development.”

After the Panchmarhi conclave in 1998, the reformists in the Congress thought the issue had been settled once and for all with the adoption of the slogan “reforms with a human face”. However, the prospect of being seen as the “B-team” of the BJP seems to have given the anti-reformists an opportunity to rekindle a spurious debate.