UPA-II’s first policy victory has already happened. It has defeated cynicism. The president’s address to Parliament — the new government’s first formal policy draft — did that, by signalling serious intent throughout and intelligent thinking in parts. In the process, UPA-II has provided an interesting set of measures with which to measure its performance. There will and should be plenty of scholarly and media attention on these performance parameters. But, and no offence to UPA-II’s policy strategists, we can set aside their set of performance evaluators. In 2014, as it seeks re-election, UPA-II’s economic performance should be measured by just one old-fashioned indicator: how many Indians have stopped calling themselves farmers or farm workers.

Why is what economists call farm/ non-farm transition so important for this government? Because the question of generating more non-farm employment is coming to a head.

SEZs were UPA-I’s headline making policy response. They got caught by both activist politics and a change in the business cycle. Some of the biggest planned SEZs are in trouble. The land acquisition law is to be amended. A certain triumphalism has grown about the politics of resisting industrialisation. These represent a complex set of challenges that UPA-II will not be able to ignore. It can try and duck the question or it can try and answer it. Either way, it will mark UPA-II’s term, politically and policy-wise.

A crucial variable will be how UPA-II handles the political debate. This will mostly be determined by how the old chestnuts are disposed of. The contours of the debate will have to change. Once that happens, policy will follow, sooner or, more likely given this is India, later.

... contd.