Congress does a volte face on reforms

By S. Swaminathan

The recent Congress jamboree in Bangalore might have passed off without the customary pomp and ostentation but its dismal import for the nation would be difficult to underestimate. For a great political organisation that nurtured parliamentary democracy in its most fragile formative period to have embarked upon a patently obstructionist course of frustrating the constructive forum of the national Parliament in the wake of the Tehelka expose of suspected irregularities in defence purchase deals, is perhaps an unpardonable crime against national interests. For a party which has, for decades, been seen as a fraudulent delinquent, siphoning off public funds and kick-backs from vendors of defence equipment into the party's coffers for funding election expenses, the Congress is certainly unworthy of invoking Dharmic sanctions against the NDA Government.

Far more than the political significance of the Congress now announcing its willingness to cohabit with all non-BJP elements in prospective coalition arrangements it is the economic formulation from the Bangalore Congress that provides serious cause for concern. It is not that the principal Opposition party in Parliament is exactly waiting for an opportunity to be called upon to form the Government at the Centre in the foreseeable future.

The question that would puzzle a wide section of the not-so- politically committed public is whether the virtual recantation by the Congress of its USP (unique selling point), to borrow a marketing clichi, of its progressive pro-reform commitment, is a declaration of bankruptcy of thinking or an admission of fear that economic reforms which were initiated in 1991 by the Narasimha Rao Government have already unleashed unmanageable political confrontations even apart from irreconcilable economic contradictions.

Has the Congress developed ``cold feet'' about the staggering dimensions of economic restructuring or is it simply pretending, for reasons purely of political tactics and exigencies, that if only the BJP-led Government had not mismanaged the reforms, India would have been on course with the ``tryst of destiny'', of abolishing mass poverty and unemployment?

Superficial axioms on agriculture

The widespread discontent among farmers arising from the plummeting commodity prices is obviously a rallying point for the Opposition. That it is a real problem and a manifestation of cumulative distortions in the mismanagement of the agricultural economy is too obvious to warrant a treatise. The Congress formulation in Bangalore seemed, however, much too illogical to attribute all the distortions to the Vajpayee Government. To say that the NDA Government is guilty of neglecting the interests of farmers does not chime with the accusation that the Government has been guilty of mismanaging the agricultural economy. One need not be a learned agronomist to know that the decline in the growth rate of agricultural output as a whole during the last two years has been caused mainly by the vagaries of the weather. That there is no ``Vajpayee factor'' in agricultural output but only agro-climatic factors and production-decisions by millions of farmers induced or deterred by the regime of support/procurement prices must be known to the Congress stalwarts who ought not to have indulged in the rather crude form of coarse criticism.

It is an amusing fact that no less an economist (now turned a consummate politician) than Dr. Manmohan Singh referred specifically to the vast stocks of foodgrains with the Government and thereby, by implication, to the growing paradox of huge mountains of foodstocks and poor offtake from the public distribution system. Is the country to believe that this situation could have been caused except by a long course of gross mismanagement of the food economy of which the momentum for the mismatch between stocks and offtake was provided by the Congress governments at the Centre which made a fine art of pampering the rich farmers of Punjab and Haryana, through procurement prices that were far above those recommended by the Agricultural Costs and Prices Commission? Dr. Singh now says that his party always believed in food for work as the way out of the situation. How was it then that during 1991-96, with so many hundreds of Centrally-sponsored schemes and the verbal chant of ``reforms with a human face'', there was no national agenda for food for work linking even rural infrastructure with the project?

Claptrap about agricultural investment

Congress leaders in confabulation in Bangalore have discovered that agriculture is the mainstay of the Indian economy and that the agonising problems of the farmers have been engendered largely by declining public investments in this sector. Is it a new phenomenon or something that has persisted for decades? What was the Narasimha Rao Government's response during the heyday of economic reforms? That it was nothing much to write home about is the truth. Of course, the Government then had its constraints which continue to this day. The Bangalore resolution is not forthcoming on this factor. The economic surveys of the period (1991-96) particularly spoke about this constraint. And that is the looming fiscal deficit of the Government.

To put it in a nutshell, the problem of declining public investments in agriculture was closely linked to the implicit and explicit subsidies given to the farming community through power, water and fertilizers apart from remunerative prices. The Bangalore economic recipe talks about increasing public investments in agriculture without altering the package of subsidies and without frowning on fiscal deficit - a combination that can only help magnify the distortions in the economy!

Glory to the mixed economy

It was a joke when the BJP came up in 1996 with its mixture of Swadeshi and globalisaiton. The party paraded ``calibrated globalisation'' as its special strategy even if it is still searching for a calibrating instrument! It apparently is time for the Congress to inflict an even more cruel joke on the nation - the restoration of the mixed economy with all its state monopolies, politicisation of decisions on investments, ``the commanding heights'' for the public sector, state-directed bank credit through loan melas, the ruling politicians picking and choosing directors for corporate boards of PSEs and so forth. The danger is not that the Congress will emerge from a state of wilderness to form the government at the Centre within a viable timeframe but that the semantic subterfuge called the mixed economy may mislead some unwary future historians into believing that India over the Congress rule during 1947-77, strictly adhering to a statist controlled economy, was able to banish poverty and usher in universal welfare!

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