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<b>Mihir S Sharma:</b> As bad as it gets?

It is inflated expectations and short-term thinking that perhaps underlie the near-universal gloom

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Mihir S Sharma New Delhi
Last Updated : Jan 21 2013 | 2:54 AM IST

You have to have steel in your soul to read the newspapers these days. Everyone is either corrupt or ineffectual, rapacious capitalists cart off our natural resources unimpeded in large trucks marked “swag”, the world’s laughing at the India growth story, and Rahul Dravid has retired. Things have never been this bad, you would think. A country growing at around seven per cent is going through the sort of self-criticism that follows crushing failure, a level of self-criticism it certainly did not indulge in when it last slowed down — to lower than this level, at the beginning of this decade.

There are two related reasons for this. The first is that the current slowdown and lack of confidence are seen as man-made, entirely due to failures of governance. The anger is directly proportional to the expectations attached to those in charge of governance, particularly the prime minister. The second is somewhat less charitable: that the headlines are far too focused on the next months and years. In this we reflect the preoccupations of market participants, who critics would say have completely forgotten that a long term even exists.

The despair and anger that define our national conversation thus might come from two types of cognitive failure. We aren’t thinking long-term enough; and we expected too much.

The notion that Manmohan Singh is a disaster is now universal, fed by his personal demeanour and apparent indecisiveness. Dr Singh’s lack of boldness appears indefensible, and those more familiar with the fights he has chosen to avoid are justifiably angry.

And yet I ask: you expected something different? Forget the coalition; the Congress itself is fatally divided on reform. The prime minister has not steered his party towards wholeheartedly backing reformist endeavours — but the figure that could do so simply does not exist. Dr Singh is not powerful enough. Sonia Gandhi is too ambivalent. Rahul Gandhi is too uninterested. This is as true now as it was evident in 2004, or 2009. To blame Dr Singh for our own unreasonable expectations from his government is foolish — as foolish as American liberals “disappointed” with the irredeemably centrist Barack Obama, presumably because he is not yet walking on water and ushering in the thousand-year Kingdom of Heaven.

This government has shown itself unable to take most necessary decisions. It itself admits as much. Dr Singh’s “coalition compulsions” have become a punchline. Coal Minister Sriprakash Jaiswal told The Indian Express recently that “as we have seen, the government faces difficulties in passing even Bills of a routine nature”.

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Why, then, does it not resign, as this newspaper has editorially argued it should consider doing? Doubtless, it is in love with power, however constrained. But perhaps, in addition, it has other calculations it makes, other projects in place, which our bias towards thinking in the short term causes us to miss.

Are there, then, policy issues not yet politically sensitive enough to be red-flagged by our divisive politics? Which focus on the longer term? And which future historians could conceivably mark down to this government showing enough stubbornness to stay in office while facing near-universal criticism and contempt? Perhaps there are, and here’s a list.

First, relations with our neighbours. Trade, openness and interdependence with Bangladesh and Pakistan are crucial to India’s long-term stability. These have unquestionably moved forward at a rate unprecedented in recent history. They could transform not just the economy of many parts of India, but our national security equations. The terrified squeals emanating from the more regressive sections of Pakistan’s establishment at the thought of “economic dependence” on India certainly suggest so.

Second, reforming the government’s interface with its citizens and the economy. Enough has been written about Aadhaar. Little, however, has been said about another initiative from the prime minister and the Planning Commission that could be transformative — reform of government procurement. Currently, that’s 15-20 per cent of the economy, and entirely discretionary. Fixing that is the single biggest weapon we have against corruption; the Organisation for Economic Co-operation and Development estimates that it could increase state efficiency by as much as 30 per cent. The Bill doing so is to be introduced when Parliament returns from its recess.

Third, there’s the continuing effort to create a register of land titles, which should peak this year with legislation. That could increase agricultural growth by as much as two per cent a year for a sustained period. Again, low-key, and long-term.

Counter-intuitively, what I expect historians to re-evaluate about this government is the very approach to high-level policy making that has caused its troubles. It is too easy to assign its weakness to personality or divisions. What if it is structural? As Jack Nicholson famously growled to a room of depressives, what if this is as good as it gets? I’d argue these are the restrictions our form of government imposes on the Centre, in a polity where coalitions don’t form around concrete policy proposals. States have more power, and regional leaders are more assertive. What form can central government then take?

A form much like UPA-II, which has seen a return to what “collective responsibility” actually means. Much stupidity has been introduced into the public domain, by those who should know better, on collective Cabinet responsibility for decisions such as A Raja’s over 2G. That isn’t what collective responsibility means; it means that members of the Cabinet are collectively responsible to Parliament for decisions they take together. Mr Raja’s ministry was forced by the Prime Minister’s Office into making a coherent, on-the-record argument that 2G was not the Cabinet’s province. Mr Raja paid.

What we call Dr Singh’s inability to rein in his ministerial colleagues is actually a more acute understanding than most of the accountability and independence due to ministers — perhaps unsurprising in a man who once almost resigned a Cabinet position after being derided by a “strong” prime minister as leading a “bunch of jokers”. A moment’s reflection should be enough to realise that greater ministerial independence creates more accountability, not less — especially in a coalition system.

This government looks like it will limp along till the next elections, doing less and less in terms of immediate results, gathering more and more opprobrium. Dr Singh will leave office with his reputation shredded. Had Dr Singh quit at any time till 2011, his legacy would have been unquestioned. Questions: should anyone who sticks it out when the world has turned on him be derided endlessly as weak? Are we poisoned by disappointment and myopia? Or is the prime minister taking a longer view than headlines can convey?

mihir.sharma@bsmail.in  

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Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

First Published: Apr 10 2012 | 12:54 AM IST

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