Let’s look at the brighter side. We have Kapil Sibal instead of Arjun Singh in charge of education, and P Chidambaram instead of Shivraj Patil in the home ministry. Arguably, those are the biggest positives in the new council of ministers. Less unalloyed improvements, but improvements nevertheless, would be Kamal Nath in place of TR Baalu (roads will now get built), and perhaps Ghulam Nabi Azad in place of A Ramadoss as health minister. Salman Khursheed will deliver a clean ministry of corporate affairs, and Anand Sharma ditto at commerce and industry even if he seems a trifle lightweight for stuff like the Doha Round negotiations. Jairam Ramesh is a big plus as the point-man for the ambitious agenda to fight climate change/global warming. And Dayanidhi Maran might do more than Shankarsinh Vaghela managed to do in textiles. But we also have the egregious A Raja in situ, as also Sushilkumar Shinde, Sharad Pawar, Praful Patel, Jaipal Reddy and Murli Deora—surely, all of them do not have enough to show, or are the wrong men in the wrong place, or are not untainted. So what price all the vetting of backgrounds that is said to have been done?
Mamata Banerjee in place of Lalu Prasad is change of doubtful value at Rail Bhavan. MK Azhagiri in place of Ram Vilas Paswan in chemicals and fertiliser, and Meira Kumar at water resources are unknown quantities. But there is quite a lot of feel-good in the appointment of the new crop of junior ministers, and CP Joshi as the new rural development minister might turn out to be a surprise package. The important thing is that none of the changes can be said to be for the worse. More important, though, the seasoned Pranab Mukherjee has to demonstrate that he is in tune with a very different finance ministry and a very different economy, compared to when he was last in North Block, in the early 1980s.
The question is whether the changes and the continuities justify the sharp spurt in stock market optimism—even after discounting for the fact that some of the price surge of the last fortnight has more to do with the flow of upbeat domestic and global economic data. Despite the fourth quarter GDP numbers encouraging the hope that the economy might be on the upswing before long, almost all analysts are agreed that Indian stock valuations are now stretched, and that neither the economic outlook nor the trend in corporate results justifies today’s valuations. The unexplained buoyancy has to be on account of political change and the expectations that this has aroused. And the question, naturally, is whether investors and the business community will be disappointed.
What is remarkable is that businessmen continue to see the economy as capable of getting back to the 8.8 per cent annual average growth rate of 2003-08; they also place Manmohan Singh in the framework of what he did as finance minister, in 1991-96, not what he did or did not do as prime minister in 2004-09. Against the backdrop of that twin narrative, Dr Singh has played his cards quite well, promising disinvestment and fiscal correction with growth, and asking his ministers to deliver. The question boils down to whether this government is qualitatively different from the last one. But the world is not going back to the go-go years, or at least not for a while yet, and Dr Singh will have to recognise that he needs to open the tap for various aam aadmi programmes. Still, it is tempting to wager that Dr Singh will write a new script this time, because he must know that this is his last term and he has a golden opportunity to secure his place in history.