As
budget day approaches, there are clear signs of a
widening divide between those who helped put the UPA
government in power and those who currently run it.
The divide relates to the professions and practice
of the government on matters economic. The Prime Minister
Manmohan Singh and his Finance Minister Chidambaram,
neither of whom is known to command a popular mandate,
seem driven by a missionary zeal to further ''reform''
the Indian economy. Not a day passes without a statement
from the Finance Minister about impending decisions
to liberalise, reform or restructure one or the other
sector of the economy or segment of economic policy.
More recently he has been joined by the Prime Minister,
who when he finds a break from onerous tasks like
appointing a new Commission, Committee or Council,
demands a white paper-be it on subsidies, disinvestment
or labour law-that would recommend what he has anyway
decided he must do. In the process, he sidesteps what
those who put him in power had promised to do or not
do.
Unfortunately, what is a mission for these gentlemen
may not be good for the country, the Congress or the
UPA. Less than a year back, when the Congress was
assessing its prospects at the polls, it clearly made
three decisions, among others. The first was that
it not only needs to distance itself from, but also
frontally attack the economic agenda that the BJP-led
NDA had pursued and was promoting through the India
Shining slogan. Second, that it needs to advocate
a more balanced, rural-biased and pro-poor economic
strategy. Third, that it must showcase specific programmes,
the most important of which was an employment programme
aimed at delivering a guaranteed minimum of employment
for each household in the country, so as to make the
alternative meaningful.
These decisions suggested that the Congress had chosen
ideological clarity in place of the ambiguity which
characterized a party torn between its claim to be
the initiator of reform and its realization that advocacy
of reform may not be the right political strategy.
The results were visible in the Congress President
Sonia Gandhi's whirlwind election campaign that not
merely revitalized a moribund party but also resulted
in a remarkable result in which the Congress against
all odds emerged as the single largest party in Parliament.
Sonia Gandhi's declarations on the campaign trail
were clear. Besides arguing that the NDA government
was taking credit for many programmes launched by
the Congress, she stressed that its (the former's)
policies of liberalization and privatization, rather
than delivering a shining India, had adversely affected
the poor. Ms. Gandhi noted that the NDA Government's
policies had not benefited farmers, Dalits, backward
classes, women, minorities, and the poor. Rather,
those policies including the privatization of public
enterprises, in her view, had facilitated retrenchment
and denied employment to hundreds of youths. ``Do
not vote for these people under whose rule warehouses
of foodgrains are full, but stomachs are empty,''
she said.
Asking the question, "What has the common man
got under this rule?'', Ms. Gandhi said that the Congress
would do everything for the benefit of the poorer
sections of society if voted to power in the Lok Sabha
and Assembly elections. This she declared was no mere
promise. "What we promise in our manifesto is
not for getting votes, but to fulfill the promises
when voted to power," she said. The Congress
president also criticized the National Democratic
Alliance Government at the Centre for its "failure"
to fulfill the promises made during the last elections.
In sum, there were a number of distinctive features
of the economic programme espoused by the Congress.
It stressed that the kind of neoliberal policies adopted
by the NDA had implied that the benefits of whatever
growth had occurred had bypassed the poor. Second,
some of these policies in its view were destroying
the ability of the government to deal with deprivation.
Finally, it was opposed to privatization of the public
sector not only because these enterprises were profit-making,
but because the process endangered the employment
of those associated with these enterprises.
Given the tenor of these speeches and the promises
that were made, it was not at all surprising that
soon after the results were declared the Congress
and its partners in the UPA released a Common Minimum
Programme (CMP) that incorporated many of the promises
that had been made in their election manifestoes and
speeches. That is, the CMP was not a document forced
on the Congress or the UPA by the Left, whose support
from outside was crucial for the government, but a
document which the Congress and its UPA allies owned.
The Left's role was merely to demand some modifications
in the light of its own concerns and given its desire
to ensure that a government it supports goes at least
part of the way in meeting those concerns.
Despite all this, a few months down the line, the
UPA government seems to implementing the same kind
of neoliberal reform programme adopted by the NDA,
with the same haste and the same contempt for mass
opinion. Ignoring the CMP, the UPA government is pushing
ahead with measures of liberalisation, be it in the
form of divesting equity in profit making public sector
units, hiking FDI caps in crucial sectors including
telecom and banking, pushing ahead with the current
form of restructuring of the electricity sector rather
than reviewing the Electricity Act, and, above all,
diluting and for all practical purposes shelving the
promised Employment Guarantee Act.
In the event, a peculiar relationship has emerged
between the Congress and the Left. Having chosen to
put the UPA in power to keep out the BJP and to work
to ensure a full-term for this government, the Left
has restricted its expectations with respect to economic
policy. It merely wants the Congress to implement
the CMP which the UPA drafted and clearly owns. What
is more, despite evidence from history that Manmohan
Singh and his chosen appointees at the Finance Ministry,
P. Chidambaram, and the Planning Commission, Montek
Singh Ahluwalia, were the original votaries of neoliberal
reform, the Left raised no strong objection to this
combination on the grounds of a lack of pluralism
in economic policy making. In the belief that, as
should be true in politics, it is the Congress President
and party leadership, especially that component which
can deliver votes, who should call the shots, they
ignored the past record.
However, the first few months of this government's
rule have seen repeated attempts by the three principal
economic decision makers to violate the CMP. In some
cases, as is true of the Employment Guarantee Act,
this has occurred despite the fact that the National
Economic Advisory Council chaired by the Congress
President has come out strongly in favour of a bill
that would actually deliver on the objectives of the
Act. What is more, according to reports, an important
section of the Congress leadership has made pre-budget
demands of the Finance Minister which go far beyond
what the Left has been demanding of the Prime Minister
and his team.
The brazen manner in which the self-appointed economic
troika has been implementing its own agenda rather
than that of the Congress or the UPA has made it increasingly
difficult for the Left to maintain a reasonable posture
vis-à-vis a government it helps keep in power.
Each time the CMP has been sought to be violated or
has actually been ignored, the Left has had to protest.
The difficulty is that despite evidence of differences
within the Congress on economic policy of the kind
noted above, the party and its President appear incapable
of reigning in the troika. With the Left forced to
protest and the Congress Party more cautious, it now
appears that the CMP is the programme of the Left
and not of the UPA.
In some sense, this is the view which the offices
of the Prime Minister and Finance Minister would like
to promote. They would prefer to be seen as the modernising
force pursuing reform, despite the Left, which is
stalling reform using the CMP. In fact, the belief
of these gentlemen seems to be that the sheer embarrassment
of being seen as retrograde or obsolete would soon
force the Left to fall in line. The presumption, of
course, is that the Left would sacrifice its ideology
and its constituency, for the ''glory'' that comes
from being considered pragmatic by international finance.
There are two reasons why this kind of a strategy
is being pursued by the leadership in government.
The first is that those who are driving economic policy
are ideologically neoliberal but have never had to
nurture a party and build a mandate to come to power.
The second is that it has been true of the Congress
that in the past there have been times when its ideology
and strategy appeared to be that its rhetoric (currently
the CMP) and practice must deviate. A confluence of
these two tendencies explains the current direction
of movement.
But there are two problems in adopting this stance
in the current conjuncture. The first is that the
Congress has paid heavily in the past for allowing
its practice to deviate from its rhetoric. If the
danger of having to pay a similar price this time
around is sensed, the party may turn against its own
cabinet. Second, this time around the Congress does
need the Left to stay in power. And the Left is clearly
exasperated: witness the statements of A.B. Bardhan
in Andhra, of the CPI(M) leadership in West Bengal
and the increasingly strident criticism of the government's
economic policy by Left leaders.
If despite this the Manmohan Singh government seeks
to push through during the budget session all that
it is promising domestic and international capital,
it may force the Left to withdraw support. Maybe the
Tamil Nadu Chief Minister is right and another national
election is in the offing: suicidal tendencies are
not uncommon.