A third of the way

Manmohan Singh is a third of the way through his term in office. Other than being a generally decent influence (as on the Delhi Sikh pogrom issue), handling external relations with some panache and making sure that the macro-economic balances are not disturbed so that the economy continues to sing along, it has been an undistinguished period.

The result is that he has significantly lowered expectations for the remaining two-thirds of his term. If commentators have not been more critical, it is because of Dr Singh’s personal standing and because most people are reluctant to criticise a good man.

Nevertheless, the bald fact is that the prime ministerial cupboard is beginning to look rather bare. And bare most of all on the shelf reserved for economic reform.

For all his assertion in Parliament last week that he would push ahead with reform, and the interview to Rajat Gupta of McKinsey where he continues to promise action, the fact is that there have been more words than action. Indeed, Dr Singh seems happy with simply staying on in office and not particularly concerned with what he has to show for the days that pass by.

The legislative breakthroughs have been on the issues on which Dr Singh is not a convert. On the governance issues that Dr Singh has laid some store by, there is virtually no change.

On the issues that Dr Singh espouses — like a more flexible labour market — there is not even hope of action. And yet, some of his cabinet colleagues get away with policies that cannot possibly make the Prime Minister happy — like re-introducing government control on oil pricing, persisting with unrealistic returns on provident fund balances, introducing new legislation that puts more arbitrary power in government hands, making tax laws more complicated, and so on.

On the most important infrastructure issue, which is power supply, there has been no progress at all. As for social infrastructure, the only real change has been in the introduction of the education cess, but a good part of the money that has been collected remains unspent.

In short, this is not the reformist government one would have expected from one led by Manmohan Singh. Indeed, in many ways it probably is not his government at all.

There is the facile assumption in most circles that India’s GDP will continue to grow at between 6 per cent and 7 per cent, whatever the government does or does not do. This may well be true for the short to medium term, because of the momentum generated by past reforms, but it cannot possibly be true for the long term. Nor can inaction on the key issues lead to acceleration to an 8 per cent growth rate.

In short, the government is wasting precious time. Hard decisions have to be taken, critical governance problems addressed in the Bimaru states, and the destructive hand of government reined in so that markets can function and improve efficiency and productivity levels.

The Prime Minister may be beavering away on some of these issues, but it is an invisible effort and so far without visible result. The impression the country has is of a government led by someone who has all the right ideas but none of the determination required to translate them into effective policy, and also none of the negotiating skills with which to strike win-win deals with different elements of the ruling coalition, including some within the Congress itself.