T N Ninan: Beyond the mid-life crisis

What kind of existence does a government have after a mid-life crisis? Virtually every government of the last 40 years has been hit by crisis before the half-way mark. Of 13 governments since 1971, seven collapsed in a heap fairly early, the longest survivor being Morarji Desai’s of 1977 (two years and four months). Four others hobbled along after a mid-life crisis but never recovered: Indira Gandhi’s of 1971 (the JP movement which led to the Emergency) and 1980 (the Punjab and Assam crises), Rajiv Gandhi’s of 1985 (Bofors), and finally Narasimha Rao’s of 1991 (Babri Masjid and election setbacks in states).

The exceptions have been in the last decade. The Vajpayee government emerged apparently unscathed from the Gujarat pogrom of 2002 and felt confident enough to go into the 2004 elections with an “India Shining” campaign. The Manmohan Singh government of 2004 was a more complete departure from trend, so that he became, after Nehru, the only prime minister to serve a full term and then get re-elected. But is the old pattern coming back? At the mid-point of its five-year term, UPA-II is consumed by scandal, the economy is floundering, and the reform spirit has evaporated. Can the government get second wind?

By general consensus, the government is paralysed and incapable of meaningful action. But are obituaries being written too soon? The systematic effort to destroy the reputations of anyone who campaigns against corruption has targeted Anna Hazare himself, the Bhushan father-son duo, Arvind Kejriwal, Kiran Bedi, and before all of them Baba Ramdev. You could say they asked for trouble, but the point is that Team Manmohan has found the energy and will to play dirty. No sign of paralysis here!

There are more positive signs of life too. The new manufacturing policy, long in the works, has finally been approved. That is not to say manufacturing will suddenly start to shine, but a framework has been put in place and could pay off down the road. Then there is the new telecom policy, which not only seeks to unravel the spectrum and licensing mess that A Raja and his predecessors got the industry into, but also to look ahead to a rapidly growing data business and much greater internet connectivity. On the foreign policy front, the breakthrough with Bangladesh, successful meetings with the leaders of Nepal and Myanmar and the more ambitious framework for ties with Afghanistan, all show that the neighbourhood has been made less hostile. Other good work continues apace: Aadhaar, the skills development initiative, the higher education thrust, and the growing sums being pumped into infrastructure investment.

But while a reticent prime minister is unwilling to score his own points, attention is focused on stubborn inflation, the rising fiscal deficit, the slowdown in business, the drying up of investment, and the continuing infrastructure deficit. Amidst the growing clamour of competing voices, there would seem to be no room for manoeuvre: don’t raise interest rates, don’t raise taxes, don’t raise debt, don’t raise petro-prices or power tariffs, don’t cut pro-poor spending, put more money into agriculture and infrastructure…so how does one square the circle?

Through reform, but the goods and services tax is stuck, and the direct taxes code mangled beyond redemption. Other reform measures are discussed endlessly, but nothing happens. Corruption is hydra-headed, and beyond the government’s competence to tackle, so that much of public spending is simply creamed off. A raft of legislation (some of which could help investment) is stuck in Parliament. Finally, there are the periodic elections — every government needs the self-confidence to keep going, but where does the Congress hope to win? So, if one looks beyond UPA-II’s mid-life crisis, what price optimism?