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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.
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