Reform and resistance

PM underlines need for political consensus on reform. If only his party and government followed that lead

PM underlines need for political consensus on reform. If only his party and government followed that lead

Even as the UPA struggles to get a much-delayed raft of reformist decisions going,it is clear that currents of resistance remain. There are political disagreements on many initiatives,whether on curbing petroleum and fertiliser subsidies,opening up retail,or the pension and insurance sectors. The debate over the immediate costs of each move,or ideological blocks,or self-serving political gambits,often obscure the larger benefits. Prime Minister Manmohan Singh took these head on,in a speech on Wednesday. He spoke of the need to deepen economic reform,and the enabling conditions this would require. Reforms,he emphasised,dont happen just because there is a professional consensus,but because the political leadership is invested in these ideas,and willing to take risks to see them through.

Singh might as well have been summing up his own frustrations,trying to manage a party that wobbles between a left and right axis,and is often reluctant to make a strong argument for growth,managing inflation,curbing subsidies and taking investment-friendly actions. In fact,this ambivalence cuts across parties the BJP sounds unabashedly like the Left when it takes on the government on economic matters. As the PM stressed,shepherding economic reforms through entails creating a social consensus,levelling with the people. The UPA has shown some determination this last year. When it hiked diesel prices and capped the LPG subsidy,the PM addressed the nation,to explain the rationale. The Congress held a public rally in Delhis Ram Lila Maidan to make a political case for FDI in retail. The vocabulary of reform entered the partys political vocabulary,albeit in feeble measure,be it in Rahul Gandhis speech at CII or Sonia Gandhis campaign speeches. The PM rightly noted the Narasimha Rao governments strong backing of economic reform,and how that unwavering political support was essential. But that context has changed reform is not a matter of stealth and covert agreement any more. It must be a politically endorsed set of actions,its workings shared with the people,its trade-offs made explicit,its principles broadly accepted. That consensus can be achieved if there is clarity at the highest political levels.

The PMs assessment is exactly on the mark,and it is more the pity that his own government and party have failed to show the clarity and determination he speaks of. For long,it was the burden of the PM and his neoliberal team to press for reformist ideas,while the Congresss top leadership addressed itself only to those purportedly excluded by that process. It has proved hard to create a minimally reassuring environment for investors,as ministries undermined each other. Manmohan Singh can diagnose the problem with great acuity,but his government has left much to be desired in acting on it.