Opinion Driving backwards

Growth is good,because it leads to trickle-down,though this doesn't negate the need for direct govt intervention through anti-poverty programmes.

New DelhiSeptember 16, 2010 12:35 PM IST First published on: Sep 16, 2010 at 12:35 PM IST

A proposition used to float around,at least so far as Central government is concerned,since 1991,regardless of political party (barring the Left),that there is a consensus on reforms,even though there may be differences on the nitty-gritty. Reforms are good. Competition and efficiency are good. Growth is good,because it leads to trickle-down,though this doesn’t negate the need for direct government intervention through anti-poverty programmes.

The efficiency of public expenditure,however,must improve. Despite Left parties and NCMP (National Common Minimum Programme) and complaints about non-reform,this consensus existed during UPA-I too.

For the first time since 1991,we see this consensus breaking down. Beyond a point,one can’t differentiate between the Congress Party and UPA-II government. Congress has turned increasingly left,has incorporated the Left through NAC and NGOs and since government is unable to resist this swing,the distinction between party and government is irrelevant.

Whether Congress is attempting to do this for narrow political dividends is also beside the point. We have major state elections coming up this year and in 2011. And perhaps Central elections will also be brought forward to before 2014. But the point is this. Once Congress accepts itself as a party of government and government moves beyond the present state of complete non-action,is there an economic blueprint one has in mind?

In discussions of the history of reforms,it is often mentioned that Congress,when it was out of power,under Rajiv Gandhi’s leadership,drafted a forward-looking reforms blueprint in 1989-90. While this never became a public document,it was invoked by P.V. Narasimha Rao when there was resistance to reforms,especially around 1993.

We don’t have a blueprint now,not as far as one knows. But if we did,it would be pre-1991. Indeed,it would be the economic model of the late-1960s to mid-1970s,which did enormous damage to India in terms of lost growth opportunities. If one ignores nitty-gritty,as a broad brush proposition,young India,especially urban India,supported the reforms. It is because this young segment tacitly supported reforms,with income and employment growth,that reforms have been relatively less controversial.

Does this aspiration of young India mesh with what Congress now increasingly projects? The problem is that this projection is not being done by what is perceived to be the old guard,but the new generation within Congress. While this is primarily a dilemma for Congress,it has major consequences for the country.