The battle lines for the agenda of economic reform have been drawn less than a month into the UPA’s second term in office. Perhaps unsurprisingly for the UPA, the loudest noise against reform has come from the treasury benches. This time round the DMK and the Trinamool have voiced objections to perhaps the only significant reformist measure the government announced in the president’s address — disinvestment. There would likely be many sympathisers to this line of thinking within the Congress too. Now, with the budget just two weeks away, the government will have to decide firmly where it stands on reform.

It would do well to begin by trying to understand what explains this almost reflexive attitude against reform — defined most simply as according a greater role to markets (and smaller role to government) in economic activity — in large sections of the political class. The obvious explanation is vested interest. But surely, there is one interest which tops even that — electoral interest.

Unfortunately, political parties have come to view any association with economic reforms as a ticket to electoral defeat. This perception first gained currency after the electoral mauling the Congress received in 1996, after serving a reformist five-year term many economists hail as transformative for the Indian economy. The second instance (which scarred even the pro-business BJP) is the defeat of the NDA, perhaps the first genuinely pro-business government in independent India, in 2004. Again, like the Congress in 1996, the NDA government ran with the reform cum growth platform and bit the dust. At the state level, the twin defeats of strongly reformist chief ministers, S.M. Krishna in Karnataka and Chandrababu Naidu in Andhra, also persuaded regional politicians of all colours to be cautious about reform.

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