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Rahul signals big ticket reforms

Rahul signals big ticket reforms
Is this the change which Rahul Gandhi promised when he said that he would initiate a transformation about which ‘you cannot even think’? Although a switch from the Amartya Sen-Jean Dreze model of a welfare-first economy to the Jagdish Bhagwati-Arvind Panagariya prescription for a growth-first version hasn’t yet taken place, the Congress vice-president has chalked out a middle course.

By saying that there cannot be a ‘trade-off’ between the two, he has given a reassuring sign to the investors, who had come to believe in the last three or four years that the reforms have been put on hold. Words apart, however, what must have been most comforting for them is the removal of Jayanthi Natarajan from the environment ministry.

It is an unambiguous indication that the government has finally learnt the lesson that sacrificing growth to placate the green activists can be politically damaging. Had the step been taken when the prime minister had accused the environment ministry of still living in the licence-permit-control raj, the magnitude of the electoral setback might have been averted.

But, the government was then virtually at the mercy of Sonia Gandhi’s kitchen cabinet – the National Advisory Council (NAC) – with its left-of-centre predilections. As Sharad Pawar has ruefully said, the NAC gave ‘free suggestions without much understanding of the ground reality’. It has taken the Congress the severe drubbing in the elections in the northern and central Indian states to understand the ground reality that people prefer economic development to sops and subsidies. Or, at least, they do not want official doles in the name of the Nehru-Gandhi dynasty to have precedence over a buoyant economy.

Whether the government has the time to reverse the slowdown caused by what has come to be known as the ‘J-virus’ to denote the activism of Jairam Ramesh and Jayanthi Natarajan cannot be said for certain, but what Rahul Gandhi’s initiative has done is at least to persuade the corporate sector to turn some of its focus back to the government from Narendra Modi, who has been its darling for several years because of his business-friendly attitude.

Even if Modi’s intention was to divert attention from his failure to adhere to raj dharma during the 2002 riots, as Atal Behari Vajpayee suspected, he seems to have understood early enough that the voters want a decisive leader and economic growth.

There are several reasons why the Congress did not realise this. One was its belief that the BJP would not be able to recover from its two successive defeats in 2004 and 2009. Some of the BJP leaders themselves thought so, for as Arun Shourie said at the time, his party had become a kati patang or a drifting kite.

This despair was the result of the leadership vacuum in the BJP after Vajpayee’s retirement. L.K. Advani was deemed too old, which is why he was kicked upstairs to be chairman of the parliamentary committee even when he wanted to be the leader of the opposition in the Lok Sabha. It was Modi’s sudden appearance on the national scene after he had emerged victorious in his internal battle with fellow pracharak Sanjay Joshi which changed the scene. Even as Modi was nurturing his ambitions and holding sadbhavna fasts to mollify the Muslims, the Congress was blissfully unaware of the dark electoral clouds gathering on the horizon.

All that the NAC and its ‘socialist’ mentor, Sonia Gandhi, could think of was more handouts – the right to education even if the scrapping of annual examinations up to Class VIII meant that Class V students couldn’t read Class II textbooks, the supposed master stroke, the right to food, and a right to homestead bill, which has been drafted by – who else? – Jairam Ramesh.

There are hints that the proposed Congress manifesto will include a proposal in favour of extending the quota system to the private sector, which has been a longstanding wish of the party. It was a part of a resolution which it adopted at a meeting in Shimla in 2003. At that time, it had no idea that it would win in the following year. But, now, that it is on a slide, it is unlikely that the idea will be seriously revived if only because of the party’s belated realization that sops do not work in the changed atmosphere of a post-1991 liberalised economy.

The significance of Rahul Gandhi’s pro-reforms stance is that it is the first time that the first family has okayed pro-market policies when neither mother nor her son had ever said a word in favour of reforms in the last 10 years. Instead, their emphasis was on populism.

During the election campaign, for instance, Rahul Gandhi said that while the opposition stressed the importance of roads, bridges and airports, the Congress thought only of the poor.

It has taken the shock of the defeat for him to see the writing on the wall. And, now that the prince has approved of reforms, the herd of sycophantic Congressmen is likely to turn from socialism to neo-liberalism.

IPA
Amulya Ganguli

Amulya Ganguli

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