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When the news is too good and too early, better be on guard
Manmohan Singh

New Delhi, Feb. 1: India is upbeat — the economy is growing faster than ever and the polity is stable — but Manmohan Singh is a worried man.

He should be happy, for reasons the Congress thinks are dear to the economist Prime Minister. India’s gross domestic product (GDP) is up 9 per cent in 2005-06 against the estimate of 8.4 per cent; the agriculture sector has grown 6 per cent, compared to advance estimates of 3.9 per cent; growth in manufacturing was 12 per cent, against 8.9 per cent the year before; and industrial production grew to 11.4 per cent from 10.8 per cent in the same period.

Government sources said the last such jump in manufacturing and industrial growth was in 1996.

Yet, the Prime Minister is concerned. “The good news has come two years too early. The Prime Minister reacted cautiously because he knows keeping up this level of performance is going to be a long haul,” a source said.

smile...
• GDP up
• Farming rosy
• Manufacturing robust
...sulk
• Inflation
• Implementation of social sector schemes
• Keeping the Left happy

If the general elections were next week, next month or even three months away, Singh would have been elated. But his government seems to be in no imminent danger of being toppled. As for the state elections, they come and go like summer storms, setting off dervishes that inflict no “long-lasting damage”, the sources said. The Prime Minister, therefore, looks set to serve out his term till 2009.

Improving on the staggering growth figures or even sustaining them for the next two years is not “going to be easy”, Singh knows.

Therefore, if the Prime Minister spent much of 2006 focusing on foreign policy and pursuing the Indo-US nuclear deal, in 2007-08, he is expected to focus on domestic matters. The nuclear deal has entered the stage of negotiations on the nitty-gritty of the various clauses, before the 123 agreement is sealed and signed. Singh has left the matter to Shyam Saran, his special envoy on the deal who has begun talking to members of the Nuclear Suppliers Group.

Inflation now tops the Prime Minister’s agenda. Along with the good news on growth rate have come bad tidings of unchecked rise in prices of pulses, cereals and vegetables. Singh monitors the price index in regular meetings of the cabinet committee on prices.

With his party worried about the impact of inflation on the slew of state elections this year, it is believed that Singh, Congress chief Sonia Gandhi and external affairs minister Pranab Mukherjee get together frequently to monitor the price scene. The Prime Minister appears to have come to increasingly rely on Mukherjee for inputs and views on economic matters as well.

If inflation is a key area of concern, another is implementation of social sector schemes started by the government. The Prime Minister does not share a widely-held conviction in the political establishment that slogans, not schemes, fetch votes. “He believes those days are gone. If there is good work done on the ground, people will reward the MP or MLA with a new mandate,” a source said.

Based on periodic reviews of the Rural Employment Guarantee Scheme, Bharat Nirman and the Urban Renewal Mission among others, the Prime Minister’s Office feels that while the “developed” states in the south and the Congress-ruled states are mostly on target, the cow belt is lagging behind. The party fears that because these initiatives are closely identified with the Prime Minister and Sonia, the government and the Congress may get the flak for the tardy implementation rather than the non-Congress governments.

Another “thrust” area for the Prime Minister is to keep the Left happy. “For this, obviously, he has no evolved strategy or policy. He responds to the situations as they arise but on the whole, the Left-PM relations look good,” claimed a source.

As for the next round of state elections this month, Singh is prepared to take the verdict “in his stride”. He will campaign in Punjab where the Congress is facing a stiff fight with the Akali-BJP. If the Congress loses its governments in Uttarakhand, Punjab and Manipur, would the Prime Minister take it as a referendum against his policies and performance'

“This may be an interpretation but the Prime Minister knows by now that state elections don’t impact the Centre and vice-versa,” a source said.

If the policy to clear more SEZs (special economic zones) was put on hold, it was not because of the elections but because Singh and Sonia are keen to give a push to a relief and rehabilitation policy before going ahead, the sources added.

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