Ordinance to cover for governance failure

 By Amulya Ganguli

The desperate hurry with which the Manmohan Singh government pushed through the food security ordinance showed that the Congress had realised that it had nothing to show for its last four and a half years in office. The economy has slumped, inflation has risen and foreign investments have dried up. To deepen the mood of doom and gloom, the prime minister has become even more tongue-tied while the finance minister’s occasional attempts to talk up the economy impress no one.

The party had no alternative, therefore, but to fall back on the Nehru-Gandhi dynasty to rescue it. And, the only recipe which the Congress’s first family could think of was a heady dose of populism. The return of the paternalistic, mai-baap sarkar is not unwarranted in a situation where the economic reforms with their emphasis on free enterprise and individual initiative are petering out with the growth rate beginning to resemble the “Hindu rate” of the licence-permit raj.

It is doubtful, however, to what extent the ordinance will bring in votes for the Congress. As of now, it is no more than a paper exercise. In a way, this is better for the party since the manifold flaws of the measure will not become apparent till after the elections, especially the next general election in case it is brought forward. Till then, the party can flaunt the ordinance to claim how its heart bleeds for the poor.

It is only much later that the fallout from the profligacy of the measure, which makes a mockery of fiscal discipline and increases the burden of subsidy well beyond tolerable limits, will begin to be felt. The Congress president, however, is less interested in the long-term effects than on immediate electoral gains. Besides, she probably always thought that the reforms were a bad idea.

Brought up in Indira Gandhi’s household in her formative years as a young member of the family who was new to India, Sonia evidently imbibed to the full her mother-in-law’s insistence on following the socialistic precepts based on the Congress’s 1955 promise to introduce a “socialistic pattern of society”. Not surprisingly, the party’s resolution at a conclave in Shimla in 2003 was to open up the private sector to the quota system for employment.

The Congress wasn’t aware at the time that it was on the verge of winning power after eight years. Moreover, its success in 2004 was not because the electorate was eagerly awaiting the “nationalisation” of the private sector, but because of the BJP’s follies, viz. the Gujarat riots of 2002, which were held responsible by Atal Behari Vajpayee for his party’s defeat.

If the Congress did not try to strangle the private sector on coming to power, the reason was that the reforms initiated by the Vajpayee government had acquired a momentum. Since these were in tune with the market-oriented policies prescribed by the Narasimha Rao-Manmohan Singh duo in 1991, the Congress had no option but to carry on. It was believed at the time that Manmohan Singh had picked up the threads where he had left them in 1996.

But, it was an illusion. If the prime minister had genuinely come to believe that socialism was an “outdated ideology”, as he said recently, he did not have the gumption to go against Sonia Gandhi’s preference for the concept. Hence, the absence of what is called big-ticket reforms. Although this failure was earlier ascribed to the presence of the Left on the government’s side, it was mainly Sonia Gandhi’s reluctance to allow the full flowering of the reforms, which tied the government’s hands.

The higher growth during UPA-1 and the early years of UPA-2 was a continuation of the process, which started in Vajpayee’s time. But, the effects of the disinclination to pursue reforms are now evident in the falling rupee and with the economy in the doldrums. Arguably, Sonia Gandhi has belatedly realised that the best atmosphere for elections is not one of stagflation. But, her answer, in accordance with the advice of her left-of-centre National Advisory Council, is to throw money and food at the poor.

While the rural employment scheme demonstrates how money can be spent on unproductive expenditure – “how many ditches will you dig? how many ponds will you rebuild? how much forestation will you do?” as the rural development minister Jairam Ramesh asked recently – the right to food, which aims to provide 5 kg of food grains at throwaway prices to 67 per cent of India’s 1.2 billion population with an annual expenditure of Rs 1,24,724 crore, is an example of an extravagant dole.

Yet, like the right to education which has led to a situation where only 30 per cent of Class III students can read Class I textbooks because there are no examinations till Class VIII, Sonia Gandhi is not interested in what actually happens on the ground, but in making the gesture of a munificent feudal family. There is little doubt that the logistics of procuring 600 lakh tonnes of food grains and storing, transporting and distributing them are beyond the creaky capacity of the corruption-ridden Food Corporation. But, it will be for the next government to clean up the mess. [IPA]