SHEKHAR GUPTA - Indian Express

Different Strokes by Sucheta Dalal

March 01, 2001

Why do we reform only under pressure?
Good budget, not enough

What did the BJP’s most vocal spokesmen say when Manmohan Singh presented his first reformist budget? ‘‘The Congress has hijacked our agenda,’’ they said. Then, how did the Congress respond when the BJP moved reform forward? It said reform was its agenda and the BJP was now hijacking it. How come, then, if both parties claim they invented the idea of reform and the other is hijacking it, the country, or its dawdling economy, is still held to ransom?

Our politics is instinctive. But the political commitment to reform is out of compulsion. This is how instinctive politics works. When you are in the Opposition, oppose everything the government does. When in power, never give any credit to those who did something good before you. If you had a real consensus on reform, how would you play your politics? Already, there is too much consensus in our system on issues ranging from internal security to external threats to foreign and social policies. We all agree all of Kashmir is ours. That the nuclear tests were a great thing. That the non-aligned movement is still alive (!) and so on. Now if you started passing unanimous resolutions on the economy as well it will be the end of politics.

While there is no instinctive belief in reform, the process is driven by the notion of compulsion. Arre bhai, the world is changing (as if it is such an awful thing) and we have to keep pace. So politicians will sign the covenants of WTO and then, even at CII seminars, say things like, ‘‘but there is no escaping globalisation, so we better prepare for it.’’ It is a bit like saying, since a jail sentence is inevitable, let us improve conditions in our prisons. Why blame the poor voter then if he does not offer you a real constituency for reform? How many politicians, including Yashwant Sinha and Atal Bihari Vajpayee, after today’s very solidly reformist budget, would have the courage to go on public forums, Parliament and Doordarshan and say that globalisation is a very welcome change. It is an opportunity we must exploit. And to be able to exploit it, and give ourselves the rewards we deserve, we must aggressively deregulate, privatise and so on. The theme, on the other hand, will be, we have no choice but to reform. As if globalisation was a disease and reform, a bitter medicine.

That is why even a budget as good as this is blighted by this political reality. Sinha talks of aggressive disinvestment, labour reforms, downsizing and so on. Is his own political universe prepared to absorb, if not facilitate, these bold changes? We have seen over the past week, between the Balco tamasha and Mamatadi’s disaster, ample evidence of how politics, even within the ruling coalition, can slow reform down. Actually, it is only after the allies have done their damage that the Opposition gets the opportunity. A bit like Shane Warne coming at you after McGrath and others have already picked half your batting.

Accordingly, while both major political groups in our country swear by reform, each holds back the other. There is no real economic debate in our politics dominated as it is by the ignorant politician. Just slogans and counter-slogans of shame, scandal and then a stampeding of all policy-making. One who dares to speak even a wee bit intelligently is immediately labelled a western stooge or, more benignly, an IMF/WB agent. The Left and the committed socialists are at least consistent. We disagree with them but they are more convincing than a Congress or a BJP in the Opposition because they do not do the opposite when they come to power. The real damage to our country is not being done by ideologues. It is being done by those who have no ideological understanding or commitment vis-a-vis the economy. We then pay for their lack of intellect as well as integrity.

Economic illiteracy is not confined to our politicians. How many of our decision-makers, bureaucrats, legislators, even judges, keep pace with new technologies, changes in the world of industry and enterprise, our marketplace in general? The gap between our establishment and the realities of today’s economics is dangerous. And it is unreasonable to expect just one good budget to bridge it. It requires political will and commitment of the highest order whereby top leaders should look their voters in the eye and say that reform is the best thing that can happen to them. Unlikely that you can count many who would say so in this coalition. Or in the Congress which, in its quest of becoming like the New Labour is looking more and more like the decrepit old one.

Meanwhile, the world leaves us behind so rapidly that a thousand nukes won’t be able to make us anything resembling a serious power of the coming decades. China grows at 10-11 per cent. It collected 40 billion dollars in FDI last year against our two. It now has the cash to modernise its textile and garment industries so fast we will not be able to move a muscle before they devour ours.

Even the Pakistanis have modernised their textile industry while we debate the future of NTC. The Chinese have beaten the world on toys, now they will do so on garments, then on leather and finally, who knows, on infotech. We will still be talking about sectoral caps and other absurdities. The Chinese sold their oil monopolies when oil company shares were booming internationally. We still do not know where to move with an HPCL today, a BPCL tomorrow. Last year, when telecom boomed, the Chinese collected 10 billion dollars for China Telecom. We are still figuring what, how, when and how much to divest out of VSNL, MTNL, BSNL and so on.

Our economic problems are daunting. The threats are scary. Yet the opportunity is fantastic, and is still there. The problem is, unless there is a larger change in our political discourse, it is silly to expect one budget to bring about a turnaround. Even a string of good ones won’t be enough. The world does not move at our pace. If reform has to follow an annual budgetary cycle, it is too slow to make a difference. Our economic problems — and opportunities — are too serious to respond to mere homoeopathy like this. They call for radical, reformist therapy. It is difficult to see our politicians having the intellect or the willpower to administer that before it is too late.