A new environment? PDF Print E-mail
Wednesday, 13 July 2011 00:00
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Little else beyond Jairam’s exit. Most NPAs remain: Prime Minister Manmohan Singh couldn’t have found a better way to signal the economy was back on the agenda than by removing Jairam Ramesh. A good environment minister is critical—keep in mind that A Raja was Jairam’s predecessor!—but Jairam took it to the other extreme and was seen as the biggest hurdle to investment. While the cancellation of Vedanta clearances at Niyamgiri were aimed to coincide with Rahul Gandhi’s date with the tribals, in the case of Posco, the ministry went out of its way to show Posco hadn’t dealt with tribal sensitivities (months later, it agreed there were no tribals there!); in the case of hill-town Lavasa, the objections weren’t serious enough to merit the punishment ... The choice of Jayanthi Natarajan is a bit curious given her lack of experience but with her legal background, it could work out.


Some changes, like upgrading Beni Prasad Verma to Cabinet rank and giving Salman Khurshid Law & Justice are aimed at the UP elections, and Veerappa Moily was probably punished for the mess in the law ministry, best exemplified by the Solicitor General’s tantrums a few days ago. Part of the government’s problem with the Court has been dumped at Moily’s door, though the bulk of the damage—when law officers were approached directly by Raja—such as in the 2G case was done before he took over. Why Moily should do well in Corporate Affairs if he did badly in Law is an open question, and applies to other ministers—power minister Sushil Kumar Shinde did precious little but hasn’t been shifted. Dinesh Trivedi, expectedly, has got Railways and we have to hope he rises above his party loyalties—when the Kalka Mail crashed, fellow TMC minister Mukul Roy preferred to accompany Mamata Banerjee than visit the crash site!

That said, how much more should we expect from the new Cabinet? It’s just a tad younger and has some more dynamic ministers in some key places—Jairam in Rural Development gives it the kind of energy that Vilasrao Deshmukh could never impart. That Deshmukh has been given Science & Technology speaks poorly of how it continues to be viewed. In terms of specifics, issues like Cairn-Vedanta and the big delay in appointing heads in ONGC and UTI (witness the finance ministry’s fight with US investor T Rowe Price) still remain, and no changes have been made here. Jairam dealt a big blow to Vedanta by cancelling its environment clearance on the eve of his departure and we have to see how Natarajan undoes this. The government remains unable to take a decision on closing Air India, but refuses to let it function—once again, no changes here. The NAC-driven agenda of asking mining firms to share profits with tribals, the expensive Right to Food Act, more reservations … all will continue to dog UPA-2. There are legislative hurdles in implementing important reforms like FDI in insurance and multi-brand retail, and there is no progress on the critical land acquisition Bill (with over 70% of Singur farmers in favour of selling to the Tatas, the Bill would have killed the agitation!). The niggardly hike in FDI limits for FM radio, from 20% to 26%, and the paralysis on oil price signals the government’s overall lack of comfort with big reforms. So UPA-2 has a long haul ahead. India Inc, however, is happy with Jairam out. For now.


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