Sunil Jain: Here's to finding Dr Singh

RATIONAL EXPECTATIONS

When asked by Rajdeep Sardesai on CNN-IBN what she thought was the biggest achievement of the Manmohan Singh government, Congress President Sonia Gandhi said there were many but the biggest was clearly the passage of the rural employment guarantee Bill. When asked if she thought the money would ever get to the poor given India's record with such schemes""Rajdeep even invoked Rajiv Gandhi's famous statement on this""Gandhi gave the "that's the challenge" line that's supposed to sound heroic but sounds just what it is. Trite, since all that Gandhi or anyone needs to do is to go to the National Food for Work Programme's website and see how full of holes the implementation continues to be.

Rajdeep didn't persist with this line since he had several other "on a personal note" questions he wanted to get in (does she get to play with the grandchildren, does she miss doing something and so on), but had he, other achievements would probably have been the Bill to reserve seats for SC/STs and others in privately run educational institutions, and the moves to get in reservations in private sector jobs! Here we were thinking Dr Manmohan Singh would give us a modern government (remember all that stirring talk of "second generation reforms"?), instead he's giving us one that has not learnt that such quota policies have held back growth over the past 58 years.

Indeed, there's a draft pharmaceuticals policy doing the rounds right now that actually seeks to impose margins on all pharmaceutical products and wants to create a separate set of chemists which, like our ration shops, would dole out BPL aspirin to the poor! I'm being unfair, imagine the money to be made when every medicine produced has to get its costs and therefore price certified (separately for wholesale and retail) by some bureaucrat sitting in some Bhawan away from the glare of a sting camera. The policy, I'm told by some friends in the industry, will never really happen and that Dr Singh is just giving pharma minister Paswan some room before he comes down on it. Sure, but that's also the view that we had about the employment guarantee Bill, and the education reservation one.

If the draft pharma policy is an oxymoron at a time when the idea's to encourage firms to grow globally competitive, consider the recent ruling by the jute commissioner that has brought all trading in the country's commodity exchanges to a halt. Since the market prices of jute were ruling at levels higher than what the mills wanted to pay, the commissioner fixed a price and decreed that no trading would take place at higher prices. This, by the way, at the same time that the Cabinet cleared changes in the Act governing forward contract, which will now allow people to trade in options in the commodities market. So, one arm of the government is moving towards deepening the markets so as to be able to trade more efficiently and the other is doing the opposite.

Of course, such is the low level of expectation that, when Dr Singh manages to get interest rates on the Employees Pension Fund kept down to 8.5 per cent (which will still mean a Rs 366 crore shortfall in the fund since the rate is still way above market rates), we applaud that he's back in business. This done, there's little sign that any serious thought is being put to address the question of the serious accounting holes in the EPF (which organisation do you know of that has two figures, 20 percentage points apart, for the amount paid out for a particular year?), or to the galloping hole in the Employees Pension Scheme (estimated at Rs 23,000 crore in 2003-04 and growing by around Rs 3,000 crore each year).

Besides, as the head of a government so concerned about the fate of the aam aadmi, how can Dr Singh justify the complete lack of movement on the New Pension Scheme, which would give the common man a chance at putting together some savings for retirement while the government (state and Centre) continues to pay out a whopping Rs 100,000 crore a year as pension to retired government employees, who probably comprise a fraction of a percent of the population? Newspaper reports suggest the Left parties want to have only public sector fund managers manage the money and that the funds be invested only in government paper (that, by the way, is how the EPFO functions and we know just how bad that is with its accounting gaps and unreconciled accounts!).

Not too many of us, in the pink press at least, have spent too much time bemoaning the shameful events in Bihar or equally brazen attempt by Delhi Chief Minister Sheila Dikshit to save all the illegal buildings in the capital, since those were political events, to be handled by Sonia Gandhi. And these were small prices to be paid for the tsunami of reforms that Dr Singh would usher in. But that isn't happening, either.

Years ago, when Dr Singh lost the election to Vijay Kumar Malhotra and cheerleaders like Isher Ahluwalia who were running his election campaign (at least among the literati) said this was a referendum on reforms, Dr Singh was modest enough to say it would have no impact on reforms. Perhaps the same can be said about his prime ministership?