To revert to a cliché, it is tempting to describe the Indian economy as having reached a crossroads once again, with the future depending entirely on the policies that the UPA-2 Government will adopt under a new Union Finance Minister.
In other words, a crisis of major proportions is gripping the economy, and much will depend on the policies adopted and implemented by the Manmohan Singh Government in the course of the next 12 months, the impact of which will lead cumulatively to either a regaining of trend rate of 8 per cent growth, or a decline to a regime closer to the Hindu growth rate scenario.
Simply put, the critical issue is: will the present Government be able to do it? Clearly, some time must be given to the players to reveal their true mettle — which must extend to at least eight to twelve weeks for the policies to be announced – before the world rushes in to sit in judgement over their performance. This has not been the case, if the recent comments made by a US newsmagazine are any indication.
NEEDS TIME
The point here is not to dismiss the specific criticism but to suggest that, in a manner of speaking, the Prime Minister be given time to get his act together and to prove to the world that the spark in him in the early 1990s, which led to a reform era which benefited the economy no end in the next 15 years, is not quite a matter of history.
Dr Singh is a man of few words but — going by the experience of the nineties — of big ideas. In early June, he is reported to have told a meeting of the Congress Working Party that the core sector would have to be restarted in a manner of speaking, and that he would not listen to any excuses in not doing so. As for inter-Ministerial differences, which have been plaguing the UPA-2 Government, he said forthrightly that he would “expect them (the Ministries) to very expeditiously resolve any inter-ministerial differences or turf battles that might arise as we move forward”.
He declared that “the Government means business”, a declaration which usually comes in handy to toothless politicians who find themselves in a corner but which, one hopes, will in this case be a call to arms to save the economy.
At the end of June, the Prime Minister was more focused in his comments, stating precisely that the “immediate need” was to “manage the balance of payments for which all policies should be directed to help institutional investment in India”.
BIG PUSH
Obviously, this can happen only if the economy is made attractive to potential investors, say the furniture mega-giant Ikea, but is this politically possible in the current Indian context? If it is not – and that is the way things look – Dr Singh’s principal test would be to bulldoze his way through the maze of hurdles and get his way, not for the sake of his Prime Ministership but for that of the average citizen.
One thing is clear, namely, that the situation, though critical, is not as bad as in the early nineties, the inference being that the “big push” required now does not have to be as big as the “reforms revolution” ushered in by Dr Singh as Finance Minister in the P V Narasimha Rao dispensation. There is little reason to doubt that the Prime Minister understands well the workings of the mainsprings of growth. The nation must, therefore, give him a chance to implement his ideas, and only then stand in judgement on whether is he an “underachiever” or not.