Political rally on reforms signals new pragmatism
It was always obvious, at least to the non-political, that a 10%-inflation-5%-economic-growth combination wasn’t the best plank to fight for re-election, but the manner in which the Congress party appears to have read the writing on the wall is truly breathtaking. Sunday’s rally, in the capital’s historical Ramlila grounds—last seen as the battleground for Anna-Hazare’s anti-Congress agitation—was not just a show by the Congress to take on the combined opposition and to try and divert attention from all the graft charges that have dogged it for a long time. It may well be true that, unlike perhaps Anna Hazare’s more spontaneous crowds, those at the Ramlila grounds on Sunday were bussed in by enthusiastic Congress leaders, but that’s missing the point.
And that point is: when was the last time the Congress party, or even the BJP for that matter, actively campaigned in favour of reforms, with FDI aayi, khushaali laayi banners at that. Even in 1991, when the Congress was in a more comfortable situation in Parliament and within its coalition, it never actively, or honestly, debated reforms. Years of mollycoddling PSUs, and India Inc along with them, resulted in a situation where India Inc (and PSU Inc) was so dramatically inefficient, you had a Bombay Club of top industrialists who were arguing caution while opening up the economy. Yet, while lowering import duties, you never had a Narasimha Rao or a Manmohan Singh talking of how high import duties were hurting the consumer, condemning her to a life of sub-standard goods. While an attempt was made to cut subsidies, at no point was the public treated to arguments made in most economists circles, that a rupee spent in investments did more for poverty alleviation than a rupee spent on subsidies which, in any case, never reached the people.
Sunday’s rally saw Manmohan Singh make the intellectual link between economic reforms and poverty alleviation but, far more importantly, saw Sonia Gandhi reiterate this. No one used heavy duty data to make this point—poverty fell the fastest in high growth years and development-spend also rose the fastest (http://goo.gl/IqNDK)—but the fact that the political class endorsed the point was a big step. No one, it is true, emphasised the fact that the current laws, like the APMC Act, hurt the farmers, but when heir-apparent Rahul Gandhi blamed the system for their plight and said that food processing benefited farmers, he was getting a buy-in of the sort not seen too often in India’s democratic politics. Not quite Obama-Romney, but it’s a start nevertheless.