PM’s wise men

The predominantly grey-haired men in grey suits who make up the prime minister’s economic advisory council are veritable economic warriors. To say their pre-budget recommendations are bold is to understate it. Daring to the point of recklessness’ may be more appropriate given that there is scarcely a constituency in the country that will not be outraged by one or more of their proposals. And the PM’s wise men know it. Hence the caveat accompanying their advice: our proposals may appear to be politically sensitive, they say, but they are essential “if we are to make really credible progress”. Cut and slash interest rates on small savings, food and fertiliser subsidies, small-scale sector reservations and import tariffs, they say, and raise passenger fares and charges for water, electricity and kerosene. Luckily for these eminences they are mere economists, not political leaders to whom is left the politically tricky task of implementing the proposals starting April 1.

The recommendations are not new. Most have been made often enough in one forum or another. For example, very similar ideas on curtailing food procurement operations and the size of the Food Corporation of India were last heard at the meeting of the Bharatiya Janata Party’s national executive. It is frequently pointed out, to little effect, that SSI reservations are illogical and strangle export growth. Exhortations that politics should not influence railway budgets are heard every year. Taken singly none of the warriors’ proposals are startling; they have lain around for a long time waiting to be adopted by the political leadership. What is remarkable is delivering the cut-and-slash proposals altogether like an aggressive trumpet blast for market reform on the eve of the Union Budget. It may not have been the intention to upstage the Economic Survey and Yashwant Sinha although that is the effect.

What is the value of daring economic formulations without the political vehicles to carry them forward? It is like going into battle with ammunition but no tanks. Atal Bihari Vajpayee has tried on the back of Gujarat’s disaster to prepare the nation for tough measures and he was steps ahead of his finance minister and railway minister. Trotting out the eco-warriors’ message three weeks before the budget may have the same purpose of preparing public opinion for a harsh budget. If so, it is not enough to guarantee smooth passage for those proposals. Are the recommendations a budget preview? Unlikely. For one, there is no sign that an effort is being made to reach a better understanding within the coalition of reform measures and globalisation. Second, Assembly elections are too close for comfort. If the political manoeuvres in Tamil Nadu are anything to go by the political churning has already begun. For the prime minister to be able to push through even a modest agenda, leave alone the recommended priceincreases and subsidy cuts, requires hard work. He must try and go over the heads of short-sighted politicians and persuade the public about what needs to be done to accelerate economic growth.