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Anniversary spirit

Jaipal Reddy carries the liberalisation torch for the UPA

Business Standard  |  New Delhi 

The Union minister for petroleum and natural gas, Jaipal Reddy, is an unlikely candidate for “reformer of the year” title, but on the 20th anniversary of Prime Minister Manmohan Singh’s pro-liberalisation initiatives of July 24, 1991, it was this diehard Congressman who revived the liberalisation spirit and chose to march ahead in a government that keeps looking right and left but shies away from crossing the road. First came the decision to raise petroleum prices, including the prices of kerosene and liquefied petroleum gas; then came the final breaking of the Cairn-Vedanta logjam; and now the clearance for the Reliance-British Petroleum deal. Mr Reddy would have made his prime minister proud with his pragmatic liberalism. He has shown how a proactive and self-assured politician can make a difference to a moribund ministry.

On the same day, a Committee of Secretaries (CoS) finally bit the bullet on the controversial issue of allowing foreign direct investment into India’s multi-brand retail sector. If the Cabinet approves the CoS’ proposal, the government will have taken one more step towards a more open economy. Stung by criticism about “policy paralysis”, the government is finally shaking off its slumber and moving forward. Taken together, a whole lot of discrete policy announcements do add up to significant action. Yet if many remain critical of the government, it may well be that the message is either not being sold or just not getting across.

It should also be recognised that the next steps in economic reform and liberalisation have a lot to do with improving the functioning of the government rather than getting the government out of the way of private enterprise. Equally importantly, a large part of the pending agenda for reform has to be executed by state governments. Given that the Bharatiya Janata Party’s (BJP’s) iconic politician Narendra Modi has emerged as a beacon of hope for business persons, with his forward-looking chief ministership in Gujarat, the BJP should join hands with the Congress party and take economic reforms at the Centre and in the state several steps forward, rather than choose to run with the hares and hunt with the hounds.

If Mr Reddy’s and Mr Modi’s spirit were to enthuse both national parties to stand up in support of pro-growth policies, the spirit of 1991 – when the Congress and the BJP worked together to bring the economy back from the brink – would once again impart new momentum to the Indian economy. On the eve of Parliament’s monsoon session the best tribute that both national parties can pay to those who saved India in 1991 would be devoting the monsoon session to collaborative legislative action that would strengthen India and desist the temptation of disruptive politicking, which may weaken the country.

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First Published: Mon, July 25 2011. 00:02 IST