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Thursday, May 26, 2022

Blame it on the Left?

Not all stalled reform is due to the Left. UPA must find a consensus to move on

Written by Nksingh |
July 25, 2008 11:49:34 pm

The trust vote, but perhaps not the taint, is firmly behind the government. Understandably there is renewed focus on the daunting economic challenges and a reform strategy that the government can complete in its remaining months in office. Rahul Gandhi in his speech in the Lok Sabha repeatedly sought a broader national consensus and conciliation on steps necessary to redress poverty, meet energy deficiency and make India a true global leader. I do believe that without such a consensus, undertaking important legislative changes will remain mired in multiple controversies.

No doubt in the administrative domain itself there is a lot that can be done and which can have a more immediate impact on our lives. Administrative reforms, improving quality of public services, speeding up project implementation, looking at ways for a quicker administration of justice as well as enforcement of contracts do not require legislative changes. Improving our rating in either the Global Competitiveness Index or on the “Ease of Doing Business” entails a host of procedural and administrative changes, which remain neglected. Many of these lie in the domain of the states. Improving governance quality in a federal polity may not be in the hands of the Central government but infusing greater trust in the matrix of Centre-state relations need not await the recommendations of the Commission on Centre-State Relations.

Equating economic reforms with those which primarily affect the banking or the financial sector in one way or the other, important as they may, cannot be the sum total of changes necessary to reinvigorate the faltering growth momentum. Improving the cost, reliability and efficiency of infrastructure is more a story of sloppy implementation than absence of enabling laws.

It is also somewhat of an exaggeration to entirely blame the Left for stalling the economic initiatives for several reasons. First, is there a consensus within the Congress party itself on the economic agenda? Many of us have not forgotten that the very reforms which are now intended were stalled by the Congress when the NDA was in office. The bill to reduce government equity in nationalised banks to 33 per cent introduced by the NDA was given a quiet burial since there was no consensus within the Congress party. Similarly the insistence on pegging a fixed number, namely 26 per cent, for foreign equity in the insurance sector was also at the insistence of the Congress. Efforts at labour reforms were resisted as much by the Congress-led trade unions as by organised labour unions of other political parties.

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The Congress has a socialist streak in its psychological make-up in no small measure by the Fabian socialist tradition of its founding fathers. Long periods of economic stagnation, periodic exchange crisis and the extraordinary balance of payment crisis in 1991 did result in a major course correction but without altering the deeply ingrained socialistic and egalitarian approach of the party.

Second, the key changes necessary in many sectors like the social sector or infrastructure did not need Left support. For instance, not all the recommendations of the National Knowledge Commission on Education were blocked due to resistance from the Left. Fostering improved primary education system, creating greater competition or appointing an independent regulator to oversee the accreditation system for higher education have been mired in the bureaucratic politics of the HRD ministry. The fact that the health minister had been unduly preoccupied in ousting the AIIMS director or banning advertisements of cigarettes and alcohol instead of addressing the more endemic issues of health to minimise the spread of infectious diseases, seek aggressive private partnership, revamp the primary health care sector is not the fault of the Left. The tardy implementation of important projects, particularly large public outlays, the worrisome progress of the national highway projects due to excessive rent- seeking by coalition partners falls in the same category. As do delayed environment clearances for large public and private investment. The controversy surrounding spectrum allocation among and between private telecom operators has detracted focus from a more rapid spread of rural telephony and ensuring that the resources of the Universal Service Obligation Fund are fully used to enhance rural network and improve broad brand connectivity. Improved expenditure management, time and cost overrun for public outlays entail innovative approaches to implementation, monitoring and accountability, which have eluded successive governments.

The Left alone cannot become an alibi for failed templates of governance in many sectors.

Third, unfortunately the value of any of the big reform is never validated electorally. Election speeches understandably are about giveaways or populist promises. Rarely about decisions which would improve efficiency, enhance productivity through increased competition, and the changes necessary to move India to a higher growth trajectory. Political parties when voted to office are held accountable to implement the populist giveaways but rarely about tardy implementation of promised reforms. Election manifestoes either by way of Common Minimum Programme or Agenda for Governance are never sufficiently explicit about difficult economic options lest they upset the electorate. Opaqueness in the formulation of economic strategy may have advantages but it does not oblige governments to implement them either. Elections are a few months away and most political parties will soon engage in scripting their manifestoes. We should learn from the past and state more clearly what is needed to move India to a 10 per cent plus growth trajectory, wipe out poverty and make up deficiency in social and physical infrastructure.

Finally, it is only in a post-election period and based on the configurations that emerge that serious legislative business can resume. However, we need to think and plan in advance in terms of helping to script commitments and programmes which could bind political parties to a desired course of action. Reforms by stealth, momentary manipulation or an accident of history do not usually stand the test of time. Examples of actions driven by a sudden exogenous crisis are not replicable in normal times.

The need to forge an understanding between the mainstream political parties is central to the conception, design and implementation of any economic strategy in a complex federal polity. Restoration of trust between political parties is more daunting than winning a trust vote.

The writer is a member of Rajya Sabha

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