Opinion Legacy politics
In its remaining term,UPA 2 must take bold decisions,shift the agenda
-
Share -
-
-
If past experience is anything to go by,governments have the opportunity to take bold economic decisions either in the very first year after they get elected or during the last six to eight months before general elections are announced. There may be a logic to this peculiar pattern. One recalls covering the key economic ministries during the last six months of the United Front coalition government in 1997-98. The chaotic United Front regime (June 1996 to March 1998) implemented some of the boldest reforms towards the last few months of its tenure. By then,the CPI,which was part of the government,had stopped attending cabinet meetings in protest against what it saw as the UFs market-oriented economic policies,even as the Congress and CPM,which supported the government from outside,threatened daily to withdraw support.
It was in these circumstances that the then finance minister,P. Chidambaram,and Defence Minister Mulayam Singh Yadav pushed some landmark reforms through the cabinet. The historic decision to dismantle the administrative price regime for petroleum products was taken by a shaky UF cabinet towards the end of its tenure. So was another seminal reform the repeal of the Urban Land Ceiling Act,which would eventually enable the optimal use of land for industrial purposes. The urgency shown by the then government to push these decisions was evident from the fact that Jairam Ramesh,as officer on special duty to Chidambaram,would personally carry the files to cut the time taken by the lower bureaucracy and get the signatures of other relevant ministers and their secretaries in the government.
Some broad parallels are visible in the UPA government today,as there is growing talk of a possible general election next year. The other parallels are Chidambaram as finance minister and a government once again dependent on Mulayam to push the big decisions. Jairam Ramesh,this time as minister,is actively pursuing changes in the land acquisition legislation. Also,like the UF coalition in 1997-98,UPA 2 also seems to be in overdrive in the last quarter of its tenure.
Having expanded the cabinet and placed Congress leaders at the helm of key economic ministries,the UPA must internalise another small but vital lesson from the fractious UF government toward the end of its tenure. The UF took bold decisions in a somewhat objective and detached manner because it knew the end was near. It did the right things,possibly because it wanted to leave a legacy.
For the last two months,UPA 2 seems to have been attempting something similar. After suffering an administrative paralysis for the first three years,it is suddenly seized with the urge to leave a legacy,too. Some may argue it is too late to do anything with a government so mired in allegations of corruption and lack of administrative will. A less cynical view could be that some revival is still possible if the UPA shifts the agenda to the real issues of development that touch the common citizen.
The preoccupation with corruption will surely be reflected in the next general elections. The Congress must take that as a given and then work towards neutralising some of it by kicking off systemic governance reforms that will have a lasting impact on future governments.
The next six months,including the budget session,offer a window of opportunity. The UPA must do the right thing and challenge the opposition on real issues,like it did with foreign investment in retail. FDI in retail was more a proxy debate on the need for a structural change in the way the agricultural economy works. It has forced the opposition leaders to think hard. It is not for nothing that Mayawati said recently that she could look at FDI in multibrand retail if it brings farmers some benefits. The UPA must come up with more ideas that challenge the current orthodoxy and create self-doubt within the political class.
Now that the Congress has its own minister for railways,the time is ripe for implementing the massive new investment plan of Rs 1 lakh crore a year for the modernisation of Indian Railways as recommended by the Pitroda Committee. Railways have the deepest link to the aam aadmi and are crying out for modernisation and capacity expansion. Pitroda reckons railway modernisation could alone add two extra percentage points to Indias GDP growth. What better time than the current investment famine to kickstart the modernisation programme? If the UPA starts this process in earnest,it will leave a lasting legacy.
Similarly,no future government will be able to reverse a systemic reform such as the Goods and Services Tax (GST),which at once seeks to create a seamless common market within the country and attacks black money linked to the land markets that is the source of so much corruption across political parties. The constitutional amendment to facilitate GST can be done within six months. It becomes irreversible after that.
The Congress,even while burdened by a two-term anti-incumbency,needs to challenge the entire political class with transformative ideas. One such idea was articulated by the Congress president at the AICC session in Burari last year but not much was heard about it later. There is an urgent need to flesh out details of a new legislation on the funding of elections,which would cut the umbilical cord between big business and politics that is at the root of the scams relating to spectrum,coal,land and other national resources.
Indias GDP is nearly $2 trillion now. Just 1 per cent of Indias GDP works out to about Rs 1 lakh crore. It is perfectly feasible for the Centre to put aside 1 per cent of the GDP for the purpose of funding elections over a five-year cycle. The burden every year on the exchequer is only 0.2 per cent of the GDP. Cant the state spend just 0.2 per cent of the GDP to clean up the electoral funding system? This has the potential to raise the political economys productivity manifold. The government could collect this fund by imposing an election fund cess on corporates. After their recent experience,corporates would be open to the idea of giving a one-time cess for the elections and being done with it. The RTI has scared big business,which earlier preferred to deal with the political class clandestinely. This is the right time to put in place an election fund which can be administered by the Election Commission in consultation with political parties based on certain norms.
Prime Minister Manmohan Singh had famously quoted Victor Hugo no power on earth can stop an idea whose time has come while launching economic reforms in 1991. Hugo needs revisiting in an entirely new context today.
The writer is managing editor,The Financial Express,mk.venu@expressindia.com
Share
