UPA 2’s deep freeze

UPA 2’s paralysis has become common knowledge. The Sunday Express laid out some of the areas in which the government appears to have abandoned the very idea of decision-making. New legislation has seemed to be too hard for the UPA’s floor managers,with the monsoon session of Parliament proving to be a dud; in the process,a large part of the line-up of crucial higher education bills remains stuck,and the social cost of each wasted session in delaying the urgent project to impart skills to India’s youth is high indeed. Then there’s the power sector,isolated by Deepak Parekh as particularly problematic; intermittent power has hit not only households but also India’s struggling manufacturing industries.

In normal times,perhaps some of this would be compensated for. But these are not normal times. Costs worldwide have risen,as commodities become scarce. Oil prices in particular are,and are likely to remain,high. And the rest of the world is slowing and sputtering. More,it is losing its appetite for risk,which means that no easy money will be flowing into India to make up for policy deficiencies. It is particularly important,therefore,to get entrepreneurial spirit up and going,to clear the way for private enterprise and to ease foreign investment. Yet there is absolutely no movement,even as problems become more pressing. Airlines are struggling as its airports remain un-upgraded and ministries squabble over raising the level of permissible foreign investment in domestic carriers. Food prices continue to rise,and there seems to be no movement on agricultural reform. Privatisation isn’t even thought about,although it is needed to re-energise scarce productive assets and strengthen the cash-strapped government. The sale of Lucknow-based PSU Scooters India was quietly frozen thanks to political concerns ahead of next year’s assembly elections in Uttar Pradesh.

Why has UPA 2 reached this pass? Too much,such as fuel pricing and coal mining policy,has been shunted off to groups of ministers that have become places to bury,not hammer out,legislation. Inter-ministry conflict manages to delay everything that requires coordination. Second,there is a pervasive fear of associating with something that might benefit the private sector,of public anger and investigation by hyperactive accountants. This,too,requires a clear political reminder of the benefits and necessity of reform. Without a reform-oriented push,starting in the winter session of Parliament,UPA 2’s deep freeze will continue.