This Central government no longer has to keep the political ideologies of allies like the communists in mind while developing and implementing policies. Despite being freed of this albatross, the president’s speech about the second Manmohan Singh government’s programme did not enthuse many. An administrator with over 30 years in the top jobs in running the country, Manmohan Singh was our one hope for reforming the administration to fit India’s requirements. There has been no administrative reform in his first term and no mention of it in the president’s speech for the second.

Neither the Congress nor the government it leads appears to have broken out of the redistributive mindset that the country got into under Indira Gandhi. The dominant element in the programme announced by the president was less about better economic and social management of the country. The programme seems to have borrowed lessons from what political parties believe to have swung the latest general elections.

Governments gave free or subsidized goods and services to the unidentified ‘poor’. Examples are the Dravida Munnetra Kazhagam’s giving away free television sets among other things, the heavily subsidized sale of rice in Andhra Pradesh and Tamil Nadu, Andhra Pradesh giving free power to farmers and so on. These free giveaways cannot at all be compared to the guaranteed payments to the rural poor through assured minimum employment under the national rural employment guarantee scheme. That ensures the self-respect of the poor who earn through their labour and can spend their earnings as they wish. There is no charity. When run well, the NREGS builds rural assets for the community and assures incomes for the poor for a period. It improves rural wages. We must appreciate the employment guarantee scheme inspired by Jean Drèze and the communists. It preserves the dignity of the poor and does not make them depend on the charity of government officials.

Other programmes that have free giveaways, or subsidies, have been subject to great misuse, and do not reach many of those they are meant for. The president’s speech adds another similar scheme: 25 kilograms of rice or wheat at three rupees per kg to the poor. There is mention of an identity card to be given to the identified beneficiaries, an idea that has done the rounds for over a decade, with L.K. Advani and then P. Chidambaram in a budget speech two years ago. There is no sign of its being implemented. The government administration had great difficulty in computerizing income tax. Identity cards are an even more complex problem. They are unlikely to happen in a hurry. Meanwhile there will be more grains to be procured, handled, transported, distributed, and much will end up in the market, diverted by greedy officials and politicians. The major achievement of the scheme will be the enrichment of government servants.

India is a major producer of rice, but wheat is occasionally in short supply. A monsoon failure will require importing the grains. Whenever India is in the market, prices shoot up. Further, the poor must have the Rs 75 at the time that they pay for the grain. Many may not have that much at one time. The programme is doomed to misuse, and is likely to miss most of those who should benefit from it.

The public distribution system has tried to supply foodgrain, edible oil and kerosene for decades — unsatisfactorily. The Food Corporation of India that does the grain procurement, storage, handling and distribution has the reputation of being a den of corruption. It is believed to pay more for substandard grain; there are many bogus ration card holders; many of the really poor do not have cards while many of the undeserving do. Some of the ration grains come back into the market. We can expect all these things to happen with this subsidized rice.

With this new scheme from the Centre, and the DMK’s propensity to give away government funds (now on laptops), the signal to all state governments is to dream up similar schemes. They think these can ‘buy’ voter support, and, incidentally, enable some illegal earnings for politicians and bureaucrats. While it would be unfeeling to object to schemes that give food and nutrition to the poor, the trend towards giving away such benefits or selling them at heavily subsidized prices have both social and economic downsides. It is not like offering free or cheap health and education services. Such services build capability and provide opportunity to the poor for bettering themselves. They are investments that will truly give dividends to the nation because of the unique demographic advantage it has of a growing young population. But giving away goods like grains, kerosene, and so on, only adds to corruption in the administration, waste, diversion from more useful programmes and creates a sense that the government is there to give away free or subsidized goods.

Our administration is not able to ensure (and perhaps is not interested in ensuring) proper targeting and prevention of huge ‘leakages’, a euphemism for theft and corruption. We should be trying to make the existing programmes more efficient and, over time, eliminate such free or subsidized goods. These high cost giveaways also add to the pressure on government finances and have for years prevented investments in health, education, infrastructure, agriculture, and so on, all very necessary for India to have a good base for long-term sustainable growth. These investments have been lagging behind badly, primarily because governments have indulged freely in heavy subsidies on food, fertilizer, kerosene, and so on. In addition, the culture of dependence they create has already made people believe that they have a ‘right’ to free or subsidized supplies from government. It results in the diversion of limited government resources from essential investments for development.

Also, the president’s speech does not mention implementation of the various reports on administrative, police and judicial reforms. These reforms are an essential underpinning for sustainable economic reforms, security improvement, and long-term growth of nine to ten per cent which the prime minister says is India’s potential.

The programme makes no mention of policy changes to insulate India from the volatile foreign institutional fund flows that have made a yo-yo of our stock markets and of the foreign exchange value of the rupee. The telecommunications ministry remains under the control of a minister who has cost the country Rs 50,000 crore by irresponsible (at best) or venal (at worst) giving away of spectrum. The education system at all levels (from primary to higher and professional education) is starved of faculty in both number and quality in every discipline. It should have been a top priority for correction. Decentralization to local authorities — both urban bodies and panchayats — has been a lost cause (because of resistance from the bureaucracy), despite the efforts of Mani Shankar Aiyar, no longer in the government.

On the external front, the programme has no new ideas. We have the stuck record that Pakistan must dismantle the terror camps, ignoring that their government is under tremendous pressure from terror strikes. We should be helping them with intelligence, and other support. Similarly there are no ideas on countering China’s “string of pearls” strategy of placing in neighbouring countries Chinese bases, roads, ports, and so on.

India had every right to expect more from this government. It claims a mandate but does not seem to know how to use it. It appears to lack understanding of the challenges before India.