Friday 10 September 2010

Is Manmohan Singh’s time up? (PO)

M D Nalapat

Had Manmohan Singh ended his political career as Finance Minister of India during 1992-96, he would have earned a few pages in the history books as the individual who implemented the 1992-94 economic reforms, which did so much to ensure a higher rate of growth. However, once he took over as PM in 2004, that period was relegated to the background. Whatever be the soft-spoken thinker’s place in history, it will almost entirely get based on his performance as PM. And it must be said that the five years since he took office have been disappointing. Economic reform stalled, while corruption continued to skyrocket. Those tracking the workings of government claimed that the final decision on most issues - especially those involving procurement - were taken by Number Ten ( 10 Janpath, the official residence of Congress President Sonia Gandhi) rather than Number Seven ( 7 Racecourse Road, the PM House).

Although the habitually tame English-language media in India said otherwise, the fact is that the public were underwhelmed by the performance of the Central government. Prices shot up, while urban infrastructure deteriorated. The progress of road construction was slow, while the provision of broadband internet and affordable mobile telephone charges was delayed. The tax structure and the web of government restrictions became ever more oppressive, and yet the much-written about Father of Reform did nothing. Of course, he busied himself in foreign policy, but to the population of India, what matters is the home front, not the fact that Singh and his demure better half were lionized in capitals across the globe. Those who had for long admired the man and saw him as a redeemer felt bitter, and many did not hesitate to vent their frustration in public, although they were of course in a minority. As is their wont, much of the media were fulsome in their praise of the PM, compliments that they bestowed on every holder of that office.

However, since the United Progressive Alliance (UPA) returned to power in 2009, Manmohan Singh changed. Several VVIPs were jailed for corruption, a drive that finally began netting the big fish rather than minnows. Petroleum prices were decontrolled and the money earned from auction of spectrum went up by more than twenty times. It had been no secret that the PM was deeply unhappy at the meagre revenue secured by the auction of 2G, but could do nothing because the political leadership of the party protected the alliance partner responsible. But when 3G began to be auctioned, Singh stepped in rather than keep away the way he had from 2004 to that period, and ensured a huge windfall for the exchequer. Of course, there have been two major failures on his watch, the first being price rise and the second Kashmir. After a flawless election in 2009, the reins of office were handed over to an untested Omar Abdullah, who expected the people of his state to emulate the US electorate and choose good looks over competence. The grandson of Sheikh Abdullah has been a total failure as CM, and ought not to have been given the reins when experienced leaders were available. Omar is considered part of the Rahul Gandhi Brigade, and if so, this first test of fire of this youthful team has been a disaster.

From 2006 to 2009,the situation in Kashmir continued to improve, even though infiltration of those who were willing to fight to get independence from India continued. The PM followed the Wajahat Habibullah line of concessions to those against India, while the groups that were pro-India (such as the populations of Ladakh and Jammu) were neglected. In Kashmir, income taxes are rarely collected, while most inhabitants in the Valley regard government service as a pension, cheerfully collecting their paycheck each month while running an administration that is one of the worst in the country. Emboldened by the extreme softness of Delhi’s approach to them, the separatists struck hard six months ago, igniting a firestorm of protest in the Valley that has sent the state government into panic mode. Clearly, there needs - at the least — to be a change of Chief Minister, but given Omar Abdullah’s closeness to the ruling Nehru family, this seems unlikely. Kashmir seems fated to once again go through years of turmoil, before the local separatists give up the illusion that Barack Obama will give them azaadi. They had the same faith in Bill Clinton, but not in George W Bush.

As for rising prices, much of the blame can be laid at the door of actions by the authorities that promote hoarding of grain (especially by huge retail companies) and allowing millions of tones of grain to rot in godowns rather than be sold or distributed to the economically weak. Since he began his second term in office a year ago, the PM has done more to rein in speculation in grain and bungling in the food front than he did in the entire five years of his first term, but interestingly, this time, he is being pilloried by the media. The reason may lie in the widespread perception that the PM no longer enjoys the confidence of Sonia Gandhi, and is therefore fair game. Certainly, these days, senior members of his (Congress) party have conducted themselves in a way that has not been seen since Sonia Gandhi threw out Sitaram Kesri and took formal control of her family’s party twelve years ago. Although MPs have openly opposed ministers close to the PM ( such as Education Minister Kapil Sibal), the Congress President has not intervened, thereby further fuelling speculation that Manmohan Singh’s time is up. However, those close to both deny that there is any rift, and say that the relationship between Singh and Sonia is still cordial and cooperative.

Meanwhile, there has been a visible transformation of Rahul Gandhi, who was once firmly in what may be termed the “middle class” camp on economic policy. The young heir to the control of the Congress Party has turned to the left, opposing major industrial projects and seeking changes in the education system that would make every private school admit poor students for free, up to 25% of their strength. India being India, the poor are unlikely to see the inside of such schools. Instead, those who bribe politicians and officials will get admission, thus creating disciplinary problems as well as making the cost of private school unaffordable to many millions of middle class students. Just as the “Mandal Reforms” introduced by then PM V P Singh roiled the country in 1990,the education reforms being piloted under the inspiration of Rahul Gandhi are likely to provoke a backlash within the middle class, thereby costing him his present status as their favourite. Rahul Gandhi seems to have forgotten all about Deng Xiaoping, the Chinese leader who has been the inspiration for reformers in India. Instead, he is going the same path as his mother Sonia, who herself has followed the path of her mother-in-law Indira rather than that of her husband Rajiv. Whether Manmohan Singh has Sonia’s support or not is hard to say, but it is clear that his pragmatic economic policy has been rejected in favour of populism by Rahul Gandhi.

Clearly, this means that there will be tension ahead between the Congress organisation and the PM, but there is no sign that this has fazed Manmohan Singh. A few days ago, for the second time in four months, he made it clear that he would complete his term in office, which ends only in 2014. The PM was pleasant but firm as he told newspaper editors that he would stick to his pragmatic policies while in office, and that he had no intention of stepping down. The question is, will he be effective in ensuring that his views prevail, or will the populist policies of the Indira Gandhi period come back? Will Rahul Gandhi continue on his present course or return to the path once trodden by Deng in China, thereby making India too an economic giant? Will he allow Manmohan Singh to remain wedded to pragmatic policies, or will he himself take over as PM and Manmohan go as President of India in a year’s time? The only individuals who know are Sonia Gandhi and Rahul, and they are not talking. Together, the two hold the destiny of the PM in their hands.

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