Seemingly indifferent economist

At least for now there is no light at the end of the tunnel, as the g overnment wrestles with problems that are a combined fallout of bad g overnance and unfavourable international conditions

If the Independence Day speech of Prime Minister Manmohan Singh could have been an opportunity for the Congress to bounce back and pull out of the morass into which it had fallen, it was an opportunity lost.

Far from electrifying the youth who are seeking direction, the speech betrayed how utterly devoid of leadership the party had become and how hopelessly listless the prime minister looked.

It was as though Singh was going through the motions of a ritual, which he was tired of fulfilling.

Of course, Singh has never pretended to have his finger on the pulse of the youth. But on that day, he seemed to be particularly clueless about the aspirations of people at large. He seemed to be living in a fool’s paradise, oblivious of the anger of people over his poor governance and the failure to measure up to the expectations of the masses. For him, it was business as usual, with the economy in dire straits and the prices of essential commodities hitting the roof. Indeed, it was like the grand old professor was living in a makebelieve world.

As if to re-emphasise his inadequacies, the next day was one of the darkest for the Indian economy—the markets were in a shambles, with the Bombay Stock Exchange falling by a whopping 769 points in a single day, the rupee dipping to its lowest ever, and gold prices moving up to a massive Rs 30,000 per 10 grams. There was little succour for the next few days, with markets touching new lows and the rupee falling further.

At least for now there is no light at the end of the tunnel, as the Manmohan Singh government wrestles with various problems that are a combined fallout of bad governance and unfavourable international conditions.

Much against the tide, Singh continued to hand out certificates to his government and to try to convince the people that the recession in the West is to blame for the country’s economic mess.

Here was a beleaguered prime minister, who knew only too well that he was being perceived as an utter failure in his second successive stint, that his biggest asset-- his personal integrity, had been completely overshadowed by unsurpassed corruption at the governmental level and was being looked upon as being so spineless that he had devalued the high office that he held, by his subservience to Congress president Sonia Gandhi.

Whatever Singh seems to do to encourage foreign direct investment ends up leading the country nowhere as confi- dence in the economy stands at a low ebb and skepticism pervades the scene both within the country and abroad.

In today’s vitiated political environment, with general elections only a few months away, it was hardly a surprise that the BJP’s campaign chief, the redoubtable Narendra Modi, went hammer and tongs against Singh, sensing an opportunity to strike, but even by his standards, the vehemence of his attack on an Independence Day was excessive.

That BJP veteran Lal Krishna Advani’s attack on Modi for attacking the prime minister on such a day was also no flash in the pan. It was part of a calculated strategy to undermine Modi and then to strategically pull back. The damage this is doing to the morale of the BJP cadres is considerable. But apparently, Advani has not given up hope that in a hung Parliament, he could still be a figure around whom consensus could be built in a postpoll scenario.

There is little hope that the next government after the mid-year elections in 2014 would be a vast improvement over this one. If recent opinion polls are anything to go by, the regional parties, most of which are obsessed with regional interest as opposed to national interest, will improve their tally at the cost of the Congress and the BJP.

With a whole array of parties waiting to jump on to either the Congress bandwagon or the BJP one, the underlying sentiment is to extract the maximum benefit from whoever comes to power at the centre.

One has only to look at the UP example, where the sand mining mafia is ruling the roost and the upright officer who tried to bring them to book, is cooling her heels after the Akhilesh Yadav government suspended her from service, to understand that mafias of all sorts are making hay under the very nose of governments, in a permissive democracy that has failed miserably as a form of government.

Even the pretence of propriety has been given up. One shudders to think how a government of regional parties would be for the country. There is no knowing whether the reins would remain with the Congress or pass on to the BJP or on to a regional party. But it would require a strong leader to ward off pressures from alliance partners in a coalition.

Price rise will continue to be the biggest challenge for the country and the more the emphasis on subsidies and on redistribution, not production, the deeper the country would slip into debt. For the last several years, there has been little thrust towards increasing the size of the cake. Populism has indeed taken over.

So completely dominated by Congress president Sonia Gandhi is the present dispensation led by Manmohan Singh that any expression of opposition from Congressmen to the populist food bill, which is Sonia’s pet baby, is virtually unthinkable.

In the bargain, the public exchequer is in poor shape. There is virtually no capital formation worth the name taking place in the states. Projects are not moving beyond the drawing board and while foreign institutional investors have deserted the stock markets, investors who once thought India was the most promising destination for investment are now hedging their bets, waiting on the sidelines to see when and if at all things improve.

It was India’s economic muscle that a few years ago brought India to centre stage and today it is the vanishing strength that is propelling the others to treat India with disdain and a casualness that is frightening.

Singh will be remembered by posterity for the manner in which a brilliant economist allowed himself to be manipulated to shed all fiscal prudence to dole out huge subsidies, culminating in a food security bill that brought an already-tottering economy to its knees for electoral considerations.