Achieving the impossible, thrice

By any yardstick, UPA 2's performance has been the worst ever for India, and the worst among most comparable countries in the world. It takes a lot of "talent" to do the following: One, increase the inflation rate from 5 to more than 10 per cent in the short space of three years. And to keep it sustained at double-digit levels for four consecutive years. No other country has been able to achieve this feat. Two, decelerate growth by a full 5 percentage points in the short space of two years, 2010-11 to 2012-13. No other country in the world, with the possible exception of Greece, has been able to achieve this decline. Actually, I lie — even Greece does better than UPA 2 India. GDP growth in Greece was -3.5 per cent in 2010 and is estimated to be -6 per cent in 2012, a decline only half that of India. Three, considerable worsening of the current account deficit — estimated to be close to 5 per cent of the GDP in fiscal year 2013-14, a decline of 3 percentage points since 2009. Incidentally, Greece shows an improvement of 4 percentage points in its current account deficit to a level close to -6 per cent of the GDP, not that far from India.

This was the background against which P. Chidambaram presented the budget for 2013-14. If you were the finance minister, wouldn't you recognise that there was a dire need to reform? Yes, I thought so too. Hence, given the extremely sorry state of affairs of UPA 2's Indian economy, it was expected that one of the leading reformers in India, PC, would present a reformist budget. Indeed, the first two minutes of his budget speech indicated that he was ready to put India back on track. But that was to prove illusory, and depressingly so. The FM proceeded to present one of the most anti-reform budgets in recent times. This is where UPA 2 achieved the impossible for three years in a row — something even Don Quixote would not dare attempt. The first impossibility was the devastation of the Indian economy in such a short period of time. The second impossibility was the retrograde budget presented by Chidambaram's predecessor, Pranab Mukherjee. The third impossibility is for a reformer to present an anti-reform budget. It appears as if PC has been made to pay for his reformer image. In all honesty, I do not see this as a PC budget; one can only speculate on the pressures he must be working under.

... contd.

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