Hear and now

This newspaper was among the minority of post-budget contrarians who argued that it is by looking at the UPA8217;s overall record, and not at what happens one day in February, that one gets a substantive picture. The UPA government started by talking positively of reforms and making some changes; for some time now it seems to be signalling it would not only not walk the talk on reform but wants to stop the talk, too. True, market reactions to any one event are ignorable. But it would be a great error to ignore the build-up in market perception that the UPA is becoming incurably allergic to reforms.

What has happened in economic policy since the PMO intervened to clear the Delhi/Mumbai airport modernisation, the last truly significant UPA reform? Three policies 8212; FDI in retail, SEZs and forward trading in agro commodities 8212; are currently victims of the politics of fear. A policy for making the rupee convertible is a victim of fear politics too, but the politics for this was done by RBI, who must have been silently thanked by many UPA leaders. Sale of even small stakes in central PSUs have become life and death national choices. There8217;s a bill allowing FDI in education that is so paranoid that the status quo ante seems preferable. Pension, banking, further insurance reform has been on hold. The small Left is more dogmatic about pension reform and a lot of other things than the larger constituent; and the BJP, the largest opposition party, is in favour. Have Congress managers ever tried to use these differences as a bargaining tactic? One can almost guess the fate of further patent law reform now that the usual suspects have gloated over a bureaucratic mix-up in the Mashelkar committee report. And the chemical department8217;s attempts to experiment with severe pharma price controls have seemingly gone unremarked in the UPA.

The Congress isn8217;t losing elections because of reforms 8212; please look at the data. Its politics is going awry in other ways. One reason the BJP made Khanduri Uttarakhand chief minister in the face of MLAs8217; opposition is his proven record as a reformist administrator. He made the highway programme an NDA showpiece. Who8217;s doing that for the UPA? Lot of people, markets included, are asking questions like these. Continued official silence won8217;t be a reassuring answer.