Post-Poll Reform Prospects Bleak

But fascinatingly, the mountain of words uttered and reported during the campaign, give a clear idea of the gut feelings, central concerns and even hobby horses of those at the forefront of the parties. Going by these, the chances of those in the leadership of the major parties being able to adopt a set of sensible not to speak of radical policies seem quite dim.

By far the most sensible points have been made by senior Congressmen or in Congress party documents obviously the result of living in the vicinity of Manmohan Singh or allowing him to do a bit of the drafting. Among the most perceptive lessons gleaned from the East Asian crisis is the one in the Congress party manifesto which notes the disastrous impact of the regions fragile banking system on its overall economy. But the same manifesto stops short of calling for privatisation of banks when it is quite clear that banks have no future unless they are professionally and transparently run, at arms length from politicians.

 

In any case, the chances of the Congress being able to practise what Manmohan Singh believes in are remote as even the most diehard Congressman does not believe that his party has a chance of forming the government on its own. If it does lead a coalition then it will be with the help of the United Front. The imprint of the Left is writ large on the Fronts manifesto and the pronouncements of its leaders. The Left will not allow the private sector into insurance, come what may. But it is all for more infrastructure investment and social sector spending. It proposes to raise the money by hiking income tax rates when the last 10 years have shown a steady rise in not just direct tax revenue but also direct tax to GDP ratio even as rates have come down. The Left is held hostage to the well-heeled white collar workers whose leadership provided the stepping stones for the rise of its now ageing stalwarts.

Which leaves us the BJP and the thoughts of its Murli Manohar-Advani-Vajpayee trio. At the fringe is the first who has all the cockiness and inadequacies of a mofussil professor. He wants India to renegotiate the Gatt. He probably means Indias membership of it. Someone please tell him that Gatt is dead; its place has been taken by the WTO. The latter has a brand new dispute settlement mechanism through which the weak can cock a snook at the strong. Someone also tell him this is for real and is the reason why the American Right hates the WTO.

Both LK Advani and AB Vajpayee declare their strong commitment to end the licence-permit raj and are great believers in Japans MITI model. First, industrial licensing is already gone, except in odd areas like nuclear power. Second, the MITI model is dated and the Japanese themselves are moving away from it. Third, you cannot have MITI and not have licensing, by whatever name. MITI helped industries but also told companies who should do what. The promotional role of MITI is no different from P Chidambarams brand equity fund. If the BJP wants him to be finance minister he may not mind. Jaswant Singh can then devote himself entirely to denying what the Swadeshi Jagaran Manch says and supervising damage control. Thus, one important thread in the BJPs economic thinking is old and frayed.

Advani, Vajpayee and anyone who is someone in the BJP, feel that Indian business needs protection, speedy tariff reduction will go against it and sharp depreciation of the rupee will make imports for manufacturing industry costly. There cannot be a better recipe for going back to the good old Congress days. Keep the rupee overvalued, maintain high tariffs, dont bother about exports in any case, you will be globally uncompetitive and at the end of the day, line the pockets of Indian businessmen at the expense of the consumer and the country. This will be the best way of going back to the days of recurring foreign exchange crises and going round the world begging for aid. We have been rescued from this indignity, which characterised the planning era, and our national pride restored by Manmohan Singh and Chidambaram.

The BJP leaders also have clear views on globalisation. Liberalise, not globalise, says Advani. The East Asian crisis has answered our critics who called us inward-looking, says Vajpayee. He is right when he says you cannot lose touch with reality and go in for unbridled foreign short-term borrowing. But a significant part of the East Asian problem stemmed from not following global norms on prudential bank lending, project appraisal, transparent accounting, and protecting shareholder value. The Bombay Club members want to go back to the good old Congress days of crony capitalism and have made the BJP the best funded party in the hope that it will win and keep its end of the bargain.