The premature reform euphoria

There are different layers in euphoria over the 2009 election mandate and not all of it is economic. In general, there is elation at stability and, compared to some initial concerns, relief that the government is going to last a full term. Specifically in the economic domain, such as in reactions from industry and pro-reform lobbies, there is expectation that reforms will now get going, with Left out of the way.

Hence, FDI in retail, pensions, insurance reform and privatization have resurfaced in the pink press. The presumption is Left obscurantism, coalition politics and key portfolios with allies held up reforms. Thank God, there won't be a National Common Minimum Programme (NCMP) now.

This hypothesis may well be true, but we can't take it to be axiomatic, as is commonly assumed to be the case. Take for instance, reforms in education. Were those held up by Left, coalition politics or allies? Congress had its own minister in HRD.

I think the most devastating critique of UPA's reform track record comes from a section in the Congress electoral manifesto, where it says that recommendations of assorted commissions and task forces will be implemented post the 2009 mandate.

These recommendations have been floating around for a long time. It is not as if they surfaced after the model code of conduct came into play. So if these recommendations weren't implemented between 2004 and 2009, how are we certain they will be implemented between 2009 and 2014?

Dr Manmohan Singh as PM, Montek Singh Ahluwalia as possible FM and P Chidambaram (wherever he happens to be) don't make reforms axiomatic. Nor does it necessarily follow that wonderful things are going to happen on retail, pensions, insurance and privatization.

A lot depends on how the Congress interprets the 2009 verdict. Is this best explained by what happened in individual states or are there national trends one can distill out? If there are national trends, are these economic, beyond containing inflation? For instance, will Congress perceive NREGS and farmers' debt relief to have been important in reaping an electoral dividend? If so, emphasis will be on social sectors, rural economy and right to food, promised in the manifesto.

There are reforms and reforms, and perceptions about what is reform gets coloured by one's biases. There is a package of reforms (fiscal consolidation and prudence, FDI, financial sector liberalization, privatization as opposed to disinvestment through minority stake sales) that may still not have many takers.

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