Surging sensex

This may finally be the break the country has been looking for. After two years of a listless economic performance, made worse by the repercussions of the Pokharan blast, suddenly there is a lot of good news coming India8217;s way. First, within minutes of the television channels8217; live telecasts relaying the BJP8217;s step by step race to victory on Thursday morning, the markets jumped a magical 119 points. A few hours later came the news that the credit-rating agency, Moody8217;s had upgraded its India outlook, partly a consequence of the mature manner in which Finance Minister Yashwant Sinha steered the post-Pokharan economy. By evening, with the National Democratic Alliance8217;s tally looking all set to cross 300, the markets jumped a magical 265 points and, in the process, increased the collective wealth of shareholders by a whopping Rs 41,000 crore. On Friday, buoyed by news that the government had charted out a blueprint of reforms to be carried out in the first 100 days, the markets crossed a historical high, and thepsychological 5,000 mark. Those who have been saying the sensex will touch 5,500 by the end of the year no longer look as outrageous as they did just six months ago.

To be sure, there is a lot to cheer about. For one, consumers are back in the shops and the economy is clearly looking up. For the past six months at least, it8217;s clear the BJP has largely put its swadeshi obsession behind it. And though it started off with a handicap, with poor Sinha neither a Chidambaram nor a Manmohan, it got over this soon enough. In terms of disinvestment, for instance, the BJP was miles ahead, quite at ease with handing over the management of a large number of public sector behemoths to the private sector. And this time around, with a tally of over 300, the government should be relatively impervious to blackmail by disgruntled alliance partners 8212; pressed to the wall, for instance, it is not inconceivable to expect Prime Minister Vajpayee to tell Chautala that he will not roll back the diesel hike and he can take his five MPs and walk away if he wishes. The logic here, of course, being that not enough of the BJP8217;s allies will gang up against it together on any one issue. Having saidthat, preserving this atmosphere of cheer will take a lot more than just the government8217;s numbers in Parliament. Sure, this will help ensure that a lot of critical legislation such as the insurance and foreign exchange ones will get passed. The big issues, however, are what the government will do with subsidies, or what it will do to ensure that the bureaucracy just gets out of the way. Vajpayee may have a freer hand this time, but will he, for instance, want to cut LPG and kerosene subsidies which cost the country Rs 12,000 crore annually, so soon after he raised diesel prices? Similarly, will the bureaucracy at the Department of Telecommunications DoT allow him to ensure that the telecom regulator is given a free hand. Today, as in the rest of the world, the government8217;s role is that of an umpire, which ensures that all players play according to the rules, that consumers aren8217;t ripped off, that no dominant player crushes the other. The problem is that it robs8217; bureaucrats of their powers, and they don8217;tlike it. Can Vajpayee rid us of the bureaucracy8217;s stranglehold?