New Delhi, Sept. 15: The country today found itself at the economic crossroads between “Scenario One” that demands courage and carries risks but promises rewards and another that presaged a programme of protests aimed at alleviating immediate pain.
Pitched by the Prime Minister, Scenario I is a Planning Commission programme that synchronises the “inclusive” goals of the UPA with some of the policy prescriptions associated with what has come to be known as Manmohanomics. (See chart above)
Shorn of jargon and put in the immediate perspective, Scenario I holds that the country needs foreign direct investment and foreign institutional investments to maintain the growth momentum and finance welfare measures.
It stresses on cutting the fiscal deficit so that the government is not forced to borrow beyond its means. It also calls for rational pricing of energy — a phrase that should find resonance in the immediate aftermath of the diesel price hike.
Such policy prescriptions are not unknown and those listed today are meant for the five-year plan that runs from this year to 2017.
But the timing of the announcement and the person who made the announcement injected an electrifying immediacy to what would otherwise have been a soporific Planning Commission meeting.
“I believe we can make Scenario I possible. It will take courage and some risks but it should be our endeavour to ensure that it materialises. The country deserves no less,” Prime Minister Manmohan Singh said today.
The Prime Minister was addressing a full Planning Commission meeting but his words were seen as nothing but a direct appeal to the country to make its choice.
Singh may lack the rhetorical flourish of some of his predecessors but rarely has a Prime Minister put before the nation its choices in such stark terms. He proceeded to list the options, bluntly telling the country that the consequences of insufficient action or a policy logjam — taunts that have been snapping at his heels for months — would be dire.
“If this (the policy logjam) continues for any length of time, vicious cycles begin to set in and growth could easily collapse to about 5 per cent per year, with very poor outcomes on inclusion,” Singh said. For the record, the Twelfth Plan has lowered the economic growth target across five years to 8.2 per cent (from the 9 per cent set earlier) because of the gloom in the global economy.
The Prime Minister appealed to the country to choose between a “virtuous cycle” and a “vicious cycle”. “I urge everyone interested in the country’s future to understand fully the implications of this scenario (the logjam). They will quickly come to an agreement that the people of India deserve better than this,” he said.
Singh defended the recent increase in diesel price “as an important step in the right direction”.
But the Opposition and some allies charged the government with “selling out” to foreigners. The NDA has called a Bharat bandh, the third front aspirants have lined up their own rally and Mamata has warned of a hard decision.
Gujarat chief minister Narendra Modi called Singh a “Singham (lion) for foreigners” and asked how many “Italian businessmen” would benefit by the retail decision.
If the Prime Minister did not show any sign of a rethink, neither did the Congress. Allies like the NCP, the DMK and the National Conference have also not gone on the offensive.
The Congress leadership has stood firm against the fusillade from allies like Trinamul and friendly parties like the Samajwadi Party and the BSP.
Ruling out the possibility of any rollback, Congress leaders said it would be difficult to reverse the decisions just to ensure the survival of the government.
The Congress appeared to be preparing for some instability if Mamata struck, although she has not yet revealed her cards. Some leaders went to the extent of saying the party was willing to run a minority government even if an ally pulls out. “Let them vote us out in the House,” a Congress leader said, referring to the Opposition.
The party also took care to speak out. Party spokesperson P.C. Chacko said: “Difference of opinion on issues does not mean crisis. There is no question mark on the majority of this government. If you are asking about Mamata Banerjee walking out, that won’t happen.”
Chacko rebutted charges of haste and lack of consultation, saying: “The decision to allow FDI in multi-brand retail was taken last year and kept in abeyance only to continue the consultation process. The government talked to everybody.”