Saying the right things

Rahul Gandhi should now write reform into the Congress manifesto

In a major speech to the Federation of Indian Chambers of Commerce and Industry (Ficci), the vice-president of the ruling Congress party, Rahul Gandhi, laid out his economic vision. Mr Gandhi, who has shown in the past a tendency to lose himself in ambitious metaphors, stuck to a clearly defined agenda that had evidently been prepared beforehand. This is not necessarily a problem, as the agenda in question certainly addressed some important outstanding issues. For one, he appreciated the costs of "slow decision-making" for industry, and promised a time-bound decision framework. Lest that be seen as criticism of the current United Progressive Alliance (UPA) government, Mr Gandhi also singled out its innovations - the Cabinet Committee on Investment and the project monitoring group - as necessary to ensure faster clearances. With less justification, he also defended the land acquisition law that the UPA had passed as good for industry. However, he showed himself conversant with the problems standing in the way of investment in India today: land and clearances prominent among them. He put weight behind the suggestion, for example, that a special purpose vehicle be created for resource-related projects that would get all the needed clearances first, and then the SPV would be auctioned. This is one way - suggested some time ago - to minimise the phenomenon of vitiation of auctions through political connections. Mr Gandhi's strong support for growth as essential to poverty reduction was also welcome.

Most importantly, perhaps, Mr Gandhi will have stunned some people by saying that he is in favour of labour law reform and the need to make the labour market more flexible. This is a long-standing demand not just from industry but from many others who have identified it as the biggest stumbling block in any attempt to build a modern industrial sector in India, with the many jobs that it would bring. It has hitherto been something that nobody in politics is willing to back. Even business-friendly Narendra Modi, Mr Gandhi's main rival in the forthcoming general elections, has at most suggested that labour law be removed from the Centre's ambit - which would require a constitutional amendment extremely unlikely to pass.

The question that must be asked, however, is if these are Mr Gandhi's genuine views, why the current government has not previously received his recommendation to implement any of them. Surely resounding support for labour law reform, for example, a few years ago would have allowed the UPA to move forward in creating a framework that would have arrested the slow decline of economic growth? There were other problems, too. For one, declaring that food inflation was a product of hoarding is, frankly, 1970s thinking - as is the threat to raid such hoarders. Mr Gandhi should familiarise himself with the supply chain problems that underlie the rise in prices of vegetables, for example.

All in all, though, Mr Gandhi said the right things. However, this was to a receptive audience. Mr Gandhi should now say similar things in his public meetings, to his party's legislators and in party meetings. The Congress has a credibility problem when it talks of reform; one speech will not change that - though it must be admitted that his message on the need to remove investment bottlenecks came hours after the resignation of Environment and Forests Minister Jayanthi Natarajan, who is believed to be responsible for delayed environment clearances and even the stalling of several projects. These words, therefore, must be more common, more consistent and followed up with more action. Above all, if Mr Gandhi actually means what he says, these words should become part of the Congress' manifesto before the general elections.