T C A Srinivasa-Raghavan: When the fence eats the hedge

LINE & LENGTH

Why did Dr Singh decide not to reform the only tool he has at his disposal, the government?

As 2006 comes to a close, and as Dr Manmohan Singh completes about half of his first term as prime minister, it seems useful to ask what his legacy will be if only because it is clear what the legacy will not be""economic and government reform.

Contrary to expectation when he became prime minister, he has delivered only a homoeopathic dose of economic reform""not least because his own party president is not convinced of the need for them""and none at all of government reform. Indeed, in many ways, governance has become so terrible that it would be nice to see a latter-day version of Colonel Sleeman, the man who quelled thugees in the 19th century, because much of what passes for government in India is just thugee by another name.

But let it also be said that what Dr Singh has done (or not done) is not exceptional. Most people, when they become heads of something, start off by wanting to change everything. But soon, faced with reality, they decide to focus on just a few things, more to be remembered for having succeeded at something than having failed at everything or even worse, having done nothing at all.

But while heads of lesser organisations can adopt this strategy, is it right for heads of government to do so also? Are they being true to their mandate if they say, "Oh, well, there is only so much I can do in the circumstances, so let me focus on that and to hell with the rest?"

Dr Manmohan Singh, for example, appears to have decided, perhaps within six months of becoming prime minister, that because both types of reform were so difficult, he would focus on foreign policy. And, as always, luck favoured him. In late 2004 or perhaps early 2005, quite out of the blue, the US proposed the nuclear deal. Dr Singh understood its importance for the country""a trade-off between military and energy security""and his own legacy.

Since then, if you look at the record, he hasn't really lent his shoulder to any sort of economic reform. He has been content, instead, to allow his ministers push for it. Some of their proposals have succeeded and others have failed. That would not be a bad thing except for one fact. Dr Singh has also allowed exactly the same latitude to ministers who want to reverse reform.

The result is that no one really knows what to expect from the government. Indeed, as we have seen in a number of cases, most recently in allowing FDI in retail businesses, we have been given half-baked solutions. This haulay-haulay (islowly-slowly) approach may make political sense to someone who has always believed in incremental progress, but it has also created the space for wheeler-dealers and dealmakers to prosper.

Meanwhile, even if we concede the Left's power""which is mostly imaginary I would say and certainly very convenient for the Congress""some progress is better than none at all, and certainly wholly preferable to retrogression. But if his political compulsions are understandable in the context of economic reform, why did Dr Singh decide to give up on reforming the only tool he has at his disposal, the government? How, for example, does he think that India can get to a sustained growth rate of 8-9 per cent with the completely useless, corrupt and blunt instrument that the government has become?

A few days ago an editorial in this newspaper pointed out that the debate in India had changed from public vs private to public and private. This is wishful thinking because the public part has simply ceased to exist at the levels where it matters.

It is also useful to dwell on the imperatives that have been at work. Basically, the public and private thing, for instance in infrastructure, is the result of bad governance. The governments transfer the little money they collect from the cities to the countryside because the votes are there. The cities suffer. The government doesn't have the money to improve things, so they turn to the private sector, which makes the investments and hopes to earn a profit.

In a sense, then, the surplus that should have accrued to the government goes to the private sector. In due course, this means the government will have even less to transfer from the cities to the countryside. Not just that either, because even the little that is transferred out will end up in the pockets of politicians and bureaucrats.

This is what has been happening till now and that is why we need good government. This is what makes Dr Singh's strategy so vexing, especially when he talks of the need for government reform, if only to deliver public services better.

So, as one looks back and looks ahead, it is difficult not to feel a sense of deep foreboding. When even prime ministers with very high credibility fail to do their duty, one is forced to ask if India is condemned forever to live with lousy governance.

What is the solution, then? Only drastic ones will do now and modifying Article 311 of the Constitution would be a good place to start. After all, if you can raise the salaries of these blackguards, why not put the fear of god in them as well?