It is not just doctors who need a good bedside manner. Governments are required to cultivate one too, not least because, from time to time, they need to reassure their countrymen that things are fine — even when the evidence points in the opposite direction. So it comes as no surprise that the Finance Minister, Mr Pranab Mukherjee, should have called in a handful of journalists — this seems to be the latest UPA fad — to tell them that the Government was in full control of the economic situation, that reforms would start ticking along nicely soon, that inflation would come down to 6 per cent by next March, and so on. It was an unconvincing performance, not because the Finance Minister cannot be persuasive. It was unconvincing because he was, not to put too fine a point on it, talking against the evidence. The real facts are as follows: investment is slowing down; the monsoon has become a cause for some worry; inflation is still uncomfortably high; the current account deficit is likely to remain large, despite buoyancy in exports; tax revenues could, and probably will, fall short; crude oil prices are again climbing to around $120; and, last but not least, given the extent of India's integration with the world economy, and the latter's difficulties in getting rid of its hiccups, it will take more than just charm and a soothing voice to get the people to believe they can go back to their TV sets.
However, it also needs saying that the Prime Minister, at any rate, has decided to press on with reforms, both minor and major. The overall objective, according to government economists, is to push up the rate of investment and, therefore, eventually supply. The first major reform that seems to have cleared various political hurdles is the entry of foreign retailers in multi-brand retail. By all accounts the Government will permit the foreign firms to hold a controlling stake. This is bound to send out the appropriate signals, especially if it is followed by reforms in the financial sector. The latter mostly relate to the freedom of firms, especially foreign ones, to launch new financial products. The Reserve Bank of India has to play an important role in this regard and it will be interesting to see how far it is able to change its conservative approach. In the final analysis, though, a great deal hinges on the passage of several reform Bills. This calls for a considerably greater measure of cooperation from the Opposition than has been the case so far. It must be hoped that the Government has been able to persuade it to act in the greater national interest and to allow Parliament to function normally during the monsoon session.
One sign that such co-operation may be forthcoming came when Mr Sushil Modi, a member of the BJP, was made chairman of the Empowered Group of State Finance Ministers. Hopefully, this will be the first of many.