The end-of-the-year disaster has altered perspectives for looking at the year 2004. All human achievements seem puny in the face of nature?s fury which swept all that stood before it. The scale of human sorrow and suffering made irrelevant all else that happened through the last year. Yet it is but human nature to look for light even in the most overwhelming darkness. The one light that slipped out of the gloom cast by the earthquake and the tsunami was the fact that the economy remained insulated from the devastation that struck large parts of south India. The year ended with the sensitive index touching 6,600, which meant that it had nearly doubled its level on December 31, 2004. The rupee at the close of 2004 was on a five-year high and foreign institutional investors had put in a record $ 8.5 billion in the Indian equity market in 2004. In fact, most observers would agree that save revenue receipts, all other principal macroeconomic indicators look good and promise better in 2005. This is a small mercy in the context of the misery of those people who faced the tsunami; nonetheless, it gives reason to smile.

Mr Manmohan Singh will wish that over 2005, the economy makes him beam. This will, to an extent, depend on the first major budget Mr Singh?s government presents to the nation at the end of February. But the economy is the least of Mr Singh?s problems. His problems are chiefly political. There is always the danger that Mr Singh, a man whose main assets are his integrity and rectitude, will be embarrassed by the allies of the Congress. With someone like Mr Laloo Prasad Yadav loose in Bihar just before a crucial assembly election, such a danger looms larger than life. Mr Singh cannot compromise his reputation in any way, and he must be on tenterhooks about the behaviour of some of his allies and even some of his colleagues within the Congress. The cause of a different kind of headache for Mr Manmohan Singh is the left, which supports the government from outside. The left, from the day Mr Singh took over the reins of power, has continuously sniped at the government and has tried to impose its own priorities. Mr Singh has been patient and polite but he has refused to succumb. The left?s ace is the threat of withdrawing support, but this might be an ever-receding horizon rather than a reality.

High on Mr Singh?s wish-list for 2005 must be the desire to free himself from the dependence on the left and dubious allies. This may not happen immediately. But this is where the good performance of the economy is critical. The better the economy performs, the better the chances of Congress flying solo and of Mr Singh being free from carping criticism. The year that is only one day old promises to be an interesting time for the prime minister and the country he leads.