Finessing the CMP

In the absence of a central command that supervises them, members of coalition governments revel in divergent views.

As seen in the last two weeks, this can create confusion and places those in actual charge of things in a difficult situation. Faced with precisely this predicament, the government has sensibly used the traditional address by the president to Parliament for spelling out what the government actually intends to do.

The speech by President Kalam at the start of the 14th Lok Sabha is noteworthy for its nuanced departures from the Common Minimum Programme, and some of the shifts of emphasis.

Clearly, the Cabinet has used the occasion to chart out a middle course between the CMP and what is actually desirable and possible under the circumstances.

More importantly, it shows that the prime minister and the finance minister have succeeded in underlining a pragmatic approach to economic policy.

Whether it is the revenue deficit target or tax policy, social issues or infrastructure, exports or agricultural reforms, the president's speech says the right things. The message, therefore, is loud and clear: there will be more policy continuity than had seemed possible when the CMP came out.

In that sense, it looks as if it will be business as usual "" slow and halting reforms, but reforms nevertheless. All populism will be subject to the "availability of resources", and efficiency and growth will get as much importance as equity.

One could have asked for more, except that the political reality intrudes. Given the Left factor and the predilections of the Congress itself (not excluding the prime minister), the public sector problem and labour reforms have been left to die in the water. Privatisation had become history last year itself because the NDA government decided in the wake of a Supreme Court judgement to disinvest and not to privatise.

This government intends to follow the same route. The speech says that "Public sector companies and nationalised banks will be encouraged to enter the capital market to raise resources and offer new investment avenues to retail investors."

Likewise, on labour reforms also, there is a broad political consensus that however desirable it might be, it simply cannot or will not be done in the way that reformers would have it. Taken together, this means that the rate of investment will be less than is needed, and this will have a direct impact on employment generation.

The other cause for worry is that job reservation in the private sector finds mention in the speech. This issue, already put in play by the Congress, has now taken another step towards centre-field. This should have been avoided.

The explicit recognition of the problems of the informal sector, which is where employment has been growing in the absence of sustained organised sector investment, is welcome and overdue. One must hope, however, that measures are not initiated that kill job growth here as well.

Two other elements are worth noting. One is the intention to legislate a model law to deal with communal violence. Given the manner in which Indian politics has been polarised, this could be an important instrument in curbing such violence.

The other pertains to foreign policy and the apparent intention to treat the US as one amongst equals rather than as the first amongst them.