An unwieldy ruling coalition working at cross-purposes is not a recipe for good governance. It is more a prescription for effective non-governance. That is why the Vajpayee government often cannot make up its mind on contentious issues. And when it does summon the will to take a decision, in two cases out of three it is unable to make it stick. Managing a ruling coalition like the one in New Delhi today means in effect mastering the art of non-governance.
It is not just weak nerves which have made the government set a record in backtracking. There are pressures to rescind particular decisions it is unable to resist without putting its own survival at risk. A word from N. Chandrababu Naidu, the 29 votes of whose party provide it with a life support system, has to be treated like a command. It cannot afford to get into a scrape with important allies like the Samata Party. Nor can it allow the rifts in the sangh parivar to widen beyond a certain point without putting the future of the Bharatiya Janata Party itself in jeopardy.
Backtracking has thus become a part of the survival kit for both the BJP and the National Democratic Alliance it leads. Indeed, in a situation where determination to see a policy decision through spells danger, a hurried retreat from positions under attack by now is accepted by the public at large as a routine happening. The news does not often make it even to the headlines. On December 2, for instance, a mid-term economic review brought into sharp focus the combined fiscal deficits of the Centre and the states, the main cause of concern to the government, adding as they do to a whopping 10 per cent of the gross national product. But the very next day the government dropped at least two of its proposals like hot potatoes. The finance secretary’s statement that there was no plan to make cuts in food and fertilizer subsidies or reduce the rate of interest on small savings surprised no one.
The proposals were made obviously in a fit of absent-mindedness since it did not require any second thoughts to see that dearer food rations would hurt the poor, more costly fertilizers would antagonize the powerful farm lobby and smaller returns on their savings would make further holes in the pockets of the lowermiddle classes. The finance minister knows too well that managing the national economy and manipulating the fragmented polity are not two different operations. They are inextricably mixed up. Jaswant Singh is not such a greenhorn as to have missed the lesson of the recent paralysis of economic policy-making resulting from the differences between the NDA partners and squabbles in the sangh parivar.
The government’s panicky retreat on two points in its agenda spelt out in very general terms to create some order out of the growing fiscal anarchy is, the finance minister will soon realize, by no means the end of the story. There are more backtrackings on the cards, judging from the text of the mid-term economic review. Since this document holds out the promise of reviving the entire gamut of policies designed to carry forward the reform process, stopped in its tracks due to fracas in both the NDA and the sangh parivar on disinvestment, labour reform and even foreign investment, the future of the entire programme is still in doubt. There is nothing to show that the parties concerned have sorted out their differences.
The cabinet may have somehow managed to clear the long pending issue of the sale of the two oil companies, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited. Yet, the compromise bears the signs of some unease on the two sides. That the more profitable BPCL will be sold by offering shares to the public is a big sop to the anti-disinvestment lobby and the same is true of the reported proposal to offer the employees of the two companies a part of the equity at a discount.
In any case, the compromise does not provide enough ground for jumping to the conclusion that the disinvestment programme will be smooth sailing hereafter. The anti-disinvestment lobby is not going to leave Arun Shourie alone. It is determined to monitor each move regarding the sale of every other profit-making public sector unit. The present decision certainly does not open the way for disinvestment in NALCO which, on present showing, promises to be another tangled and long-drawn-out affair.
In fact, every step forward will be marked by acrimony and inordinate delays engineered by anti-reformists in the NDA and the swadeshi lobby in the sangh parivar. Thus a good deal of uncertainty will continue to mark both the future of the disinvestment programme and any worthwhile attempt to reduce the increasing burden of food, fertilizer, fuel, power and other subsidies. The fiscal situation was not better at the start of the current financial year than it is today and yet a gutless government, completely unmindful of the need for harsher social discipline, let non-plan expenditure increase in the first half of the period by 13 per cent.
It is a mercy that, despite the widespread drought and the global recession, the economy is expected to grow by over 5 per cent this year, the rate of inflation has been kept down to 3 per cent and the country has ample food stocks and foreign exchange reserves. All these positive factors nevertheless are poor comfort in view of the government’s failure to create a climate propitious for more dynamic growth. Despite the notable gains in the output of steel and cement and good progress in extending the highways network, the country continues to repulse the foreign investor. If there is a consensus between the left and the right, it is on ignoring the Chinese experience as irrelevant.
Even the two recent shocks, the first administered by a US agency which rated the government debt bonds as junk and the second by a body representing US multinational companies warning would-be investors to keep away from India because of the bureaucratic hassles they would have to face, the dubious security situation in many states and the inadequate power and other facilities, have not made the government sit up and ask itself why it should project so poor an image of the country after over a decade of reforms.
The dismal truth is that the biggest obstacle in the way of putting the national economy on a much faster growth track is the kind of political culture the country has nurtured. A mindless competition in populist rhetoric rules out the pursuit of rational economic policies and a fragmented polity precludes unity of purpose, denying the government the moral authority it needs to make its writ run. A government subject to contrary pulls from its own allies and always prone to let electoral contingencies, rather than the imperatives of rapid economic development, determine its policies, can do no better than how the NDA is doing.
Even so, the present ruling coalition might have put up a better show if the turn of events had not put the BJP on the defensive, and the more aggressive members of the sangh parivar had not tried so hard to push their Hindutva and swadeshi agendas, the one queering the pitch for communal amity and the other for pushing the reform process. The result is a loss of sense of both direction and proportion on the part of the government. How else to explain the mobilization of so large a force along the border with Pakistan at such enormous expense to no purpose, or make any sense of L.K. Advani’s call to Pakistan to another full-scale war with India' Why should Islamabad take such an initiative when it finds a low-cost proxy war far more rewarding'
The same loss of a sense of balance is betrayed in recent official discourse on foreign policy. First, there was a lot of self-induced euphoria about a “strategic” relationship with the United States of America. It was followed by some vague theorizing about a similar bond with China even though the border issue with it still remains unresolved. With the recent visit of Vladimir Putin to New Delhi, the foreign policy is being attuned to a “strategic” accord with Russia, perhaps as part of a Moscow-Beijing-New Delhi axis. Have the prime minister and his aides consulted their friends in Washington what they think of this bright idea' Is it a surprise if all this loose talk and beating about the bush invite sceptical jeers'
Yet, all this is wholly in keeping with the confused thinking of the government. Will it not make far greater sense for it to spell out how it proposes to bring the fiscal deficit down to a tenable level than project a rate of annual growth of 8 per cent for the tenth plan when neither the requisite domestic resources and levels of foreign investment nor, for that matter, the kind of political culture for so great a leap forward are in sight. Such paper exercises in these circumstances provoke not sceptical but cynical sniggers.