Sins of Mr Sinha

The government’s willingness to reverse Budget measures at the first sign of opposition from any quarter sends out, loud and clear, the message that it is open to negotiation. A worse thing is harder to imagine for a sense of economic discipline. This government’s conduct on the economy in the last one week is truly unawesome. It produced a pedestrian Budget when it had everything going for a visionary and audacious one. It made a public spectacle of itself with the petrol-price faux pas, apart from making consumers rightly angry. It has now backtracked not once but two times on the modest urea price rise. Here its behaviour is more unforgivable because urea overuse in proportion to other fertilisers has done soil damage. So in fact the champions of farmers in Parliament are actually doing them harm, whereas the price rise just might have redressed this imbalance somewhat, apart from substantially lightening the subsidy burden. If the government cannot even communicate this well, it deserves every bit ofhardship it has coming to it.

Urea is not yet the full story. The Budget aside, this government also has given a poor account of itself in the area of power reform after first promising the earth. The Bill it has now introduced in Parliament is a travesty of what it initially promised and of the bare minimum required to get things going in this starved sector. Can anyone be blamed for throwing his hat in the ring for concessions when a moratorium on economic firmness seems to be in force? If it cannot withstand any pressure at all the BJP-led government will do the exchequer as much harm as the United Front one did with its Pay Commission giveaways. What is really frightening is that it does not seem to care. It certainly has opened up a Pandora’s box which will not shut with the concessions it has already given.

The Budget already was a signal that narrow sectional interests were back in the reckoning as powerful lobbying forces. Lobbying never did go away, not even in the heyday of economic reform.Indeed that is impossible. But the past several governments had given the impression that they were striving to deliver broader economic goals for large sections of the people: consumers and taxpayers. That sense is fast evaporating and, concomitantly, lobbies which had lain low for some time are coming out of the woodwork. While that happens on the business side, the political community has suddenly recalled that playing politics with the economy comes cheap in the opposition. For this the BJP has only itself to blame for the way it conducted itself in opposition. The farmer has been rediscovered, if only to pay lip service to. Opposition members make shrill noises about urea prices and Jayalalitha’s heart bleeds for farmers paying part of their power bill. What is truly hard to credit is that a finance minister could make the outlandish statement that no farmers would go to jail for failing to repay their loans! In practice all governments have been generous in this matter. But to exalt it to the level ofpolicy is the remarkable achievement of this one and a landmark in shameless populism. It had better restrain itself if it does not wish to be credited with crippling the economy.