It may be a matter of debate whether naming of the prime minister as one of their presidential candidates by two key allies of the UPA government - Mamata Banerjee of Trinamool Congress and Mulayam Singh Yadav of Samajwadi Party - amounts to an expression of no-confidence in Manmohan Singh. What is clearly not is that Manmohan Singh has utterly failed to provide leadership to the government in general and at critical moments in specific. We are not only facing an economic crisis, there is a leadership crisis which is compounding it by the day. How long can we remain adrift? That is the question we need to answer.
Past two years saw him floundering in tackling corruption as scams after scams piled up. Past six months have seen him flounder again as the economy has spluttered and all his attempts to bring economic reforms to spur investment failed. Not to forget the utter failure to rein in runaway inflation for the past four years. As a result, the GDP growth rate is consistently falling – 7.7 percent in the first quarter, 6.9 percent in second, 6.1 percent in third and 5.3 percent in the last quarter of 2011-12. That takes the average to 6.5 percent. It is big fall from 8.4 percent in 2010-11.
Manmohan Singh was never considered a political leader. That mantle was donned by UPA chairperson Sonia Gandhi, who is now ailing and may herself be looking for change of the baton. But he was expected to take charge of the executive and lead the economy to a higher growth. He has failed on both counts.
Infosys founder NR Narayana Murthy is not off the mark when he commented recently that between 2004 and 2011, the country didn’t introduce many economic reforms. In fact, none worth mentioning. The Indian economy did grow at about 8 percent in that period. Ruchir Sharma of Morgan Stanley in his book “Breakout Nations” demolished the myth that it had anything to do with our economic policy. He said the growth was because of a sudden spurt in flow of foreign funds to many countries which grew at a high rate and India happened to be one of those. He said all these in the presence of Montek Singh Ahluwalia, deputy chair of planning commission and one of the major policy makers in these years, too in a TV debate a couple of months ago. Ahluwalia didn’t even blink his eyes, forget protesting. And since then, nobody has challenged Ruchir’s assertion, lending more credence to it. After 2011, the economy has nosedived.
The PM tried to bring in FDI in multi-brand retail, in aviation and in pension in order to add life to economy as the flow of foreign funds slowed down significantly. All these were vetoed by one single ally, Mamata Banerjee, and the PM acts helpless.
To contain inflation in the past five years, his government has banked on two factors – on god for good harvest and tightening money supply. A good harvest has brought down inflation a little but it still hovers around 10 percent. But tightening money supply has sputtered industrial growth. IIP data for April, 2012, says growth in industrial output is a dismal 0.1 percent!
Reports say 123 textile mills have closed down in the past three years rendering more than 44,000 jobless. The civil aviation sector in crisis. The manufacturing sector is in crisis. The rupee is falling down, more than that of neighbouring countries. Now, the RBI is finding difficult to lower interests and increase money supply because the rupee is falling. The other day, the finance minister asked the banks to guard against rising non-performing assets (NPA). You have a serious crisis and nobody seems to know what to do.
The second big crisis to hit the UPA is corruption. The PM’s response to big-ticket scams like 2G, Coal block allotment, Devas-Antrix spectrum deal, CWG, IPL and others is typified by his response in a televised interview with editors at the height of 2G scam: “coalition compulsion”. A Raja, Dayanidhi Maran and TR Baalu ran various ministries as their personal fiefdom, ignoring some of his good advices. Therefore, Raja could bulldoze his way through and allot 2G spectrum in 2008 at 2001 prices. Some beneficiaries, who have had nothing to do with telecom, made windfall gains by selling part of the spectrum at several times higher price than what they had paid to the government. The CAG calculated the loss at Rs 1.76 lakh crore. Instead of taking Raja to task, the PM advised CAG to keep off ‘policy domain’ of the executive.
He himself handled the coal ministry when more than 150 coal blocks were allotted, many of which went to private players. He wanted coal blocks to be auctioned way back in 2004, but that never happened. Now it turns out, from the coal ministry’s notice to four beneficiaries, that some of the blocks were sold off at huge gains. Such allotments didn’t make any difference to the sector and a part of our power crisis is because of lack of coal supply to thermal power plants, which had gone on to add significant capacity on paper.
If some of the corrupts went to jail, it was because CAG exposed them and the supreme court hauled up the government.
The PM’s handling of corruption has had another dimension. He and his ministers ran a campaign to discredit Team Anna when it ran a campaign for setting up Lokpal as the apex anti-corruption watchdog. Baba Ramdev was forcibly evicted from Ramlila grounds in a mid-night operation. All NGOs opposing nuclear power plants are facing persecution. Their licences have been put on hold, their bank accounts frozen. The same government had earlier de-froze Bofors accused Quattrocchi’s foreign accounts.
Finally, a much diluted Lokpal bill was introduced in parliament but not passed. From one parliamentary committee it has gone to another.
In the meanwhile, the government bulldozed leader of opposition Sushma Swaraj’s opposition and appointed a tainted official, PJ Thomas, to head the existing apex ant-corruption watchdog, CVC. Fortunately, the court stepped in and removed Thomas.
Hit hard by the “policy paralysis” and accused of being a “lame-duck”, the PM tried to activate the bureaucracy.
His speech at the civil services day on April 21 this year can be termed very appropriate. He said: “It should be our endeavour that there is no witch hunting in the name of fighting corruption. It is our government’s commitment to put in place a system and create an environment in which our civil servants are encouraged to be decisive, and no one is harassed for bona fide mistakes of errors of judgment.”
It enthused none. The bureaucracy remains frozen, incapable of overcoming intrinsic lethargy, red tape and vested interests on its own. When the political leadership flounders and fails to take right initiatives, it is difficult for the bureaucracy to do so. After all, it is a matter of leadership.
The opposition has long stopped saying that the government is in a “drift”. It will be more appropriate to say that the government is in “intensive care unit”, waiting for 2014 elections.
But we can’t remain adrift until 2014. We need a leader to take care of the economy. That is what Azim Premji meant when he said, “We are working without a leader as a country. If we don’t change, we would be down for years”.
Probably, Mamata Banerjee and Mulayam Singh were trying to give such a hint when they listed the PM as one of their probable candidates for the presidentship. The Congress may refuse to oblige but it is a bigger issue for us to leave it to the Congress.
Time is up for Manmohan Singh. We need a PM, a leader. Whether he becomes the next president is immaterial.
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