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Tuesday, 22 January 2013 03:18
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Read what you will into the Chintan Shivir promises

After Congress heir apparent Rahul Gandhi used the party’s Chintan Shivir to position himself as the ultimate insider-outsider railing against a system that allows a chief minister “to appoint a teacher” and one which is “designed to keep people with knowledge out” and to “maintain the status quo”, it’s easy to see the weekend retreat as a strong affirmation that the party is behind the government’s recent moves to re-start the stalled economic reforms programme. More so when you look at recent moves like allowing FDI in multi-brand retail or to free up diesel prices in a controlled manner—our lead story today quotes petroleum minister Veerappa Moily as saying there will be no diesel subsidies after two years (these add up to around R1,00,000 crore a year right now) as oil PSUs will regularly hike prices though it needs to be pointed out that the government notification to oil PSUs says nothing of the sort.

The problem with all of this, including Rahul Gandhi’s speech, is that with so many messages floating around, it’s difficult to isolate the central one. If it was about the importance of education, you just have to juxtapose the findings of the latest Pratham survey about the dramatic fall in educational outcomes in rural India to know that the Right to Education Act is part of the problem, not the solution; if it was about the commitment to raise agricultural growth to over 4%, you have to see the havoc created by policies that drive out private traders from the grain market and that ban farm exports from time to time, or the way cropping patterns are distorted by hiking support prices for certain crops; if it was about controlling inflation, then it’s obvious the policy that makes FCI keep three times the required stocks of foodgrain is the problem, not the solution. If the central aim, as the Jaipur Declaration proclaims, is to create 10 million jobs each year then the party would do well to ponder over whether its pro-labour-aristocracy policies are what has caused its woeful track record in job creation—while GDP grew 1.6 times between FY00 and FY05 and employment rose from 396.8 million to 457.5 million, this slowed to just 460.2 million by FY10 even though GDP grew 2 times between FY05 and FY10. And talking to any industrialist would expose the hollowness of the pledge “to create a business environment conducive to investment and entrepreneurship”.

Prime Minister Manmohan Singh was spot on when he said the UPA’s growth record as well as poverty-reduction record was superior to that of the NDA, but a large part of the growth came from the global surge coupled with the results of the reforms made during the NDA years. The central message from that, as well as from Rahul Gandhi’s speech, is that it’s time the UPA moved aggressively on the next stage of reforms. Only when oil sector PSUs actually raise diesel prices every month—right now, they’ve lost more through raising the cap on subsidised LPG cylinders than they’ve made by raising diesel prices by 50 paise per litre—for the next year or so will we be able to conclude that the real message of the Chintan Shivir was about the primacy of the economic agenda. Otherwise it was just a wasted opportunity.


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