The Prime Minister sees the demolition of India’s success story, but does not know how to pick up the pieces

When a chief minister leads a demonstration in her own state to protest the increase in petrol price, it shows the intense feelings over the raise. But it is all too comical to see the chief minister doing so when the government is the authority where the buck stops. How are the two justified?

Something similar is happening to India’s economy — the ruling Congress angry over the increasing burdens on the people and its government behaving as if it is not accountable. Who is to blame? Was the boom a mere bubble that has burst? Is the success story over? In a way, it is, if one were to look at the tumbling growth rate from the 8-9 per cent to 5-7 per cent and the beating the rupee is receiving at the hands of the US dollar, touching Rs56 (Dh3.68) while it was Rs45 this January. The decreasing exports and slowing of industry suggest the moonlight was just a one-evening phenomenon.

Inflation crossing the 10.5 per cent-mark makes one even more pessimistic about the future. On the other hand, reports of bumper wheat crop beyond storage capacity are heartening. In the same way, the progress in information technology and telecommunications industries is inspiring. The service sector, on the whole, is also doing well. The progress doesn’t seem to be fake.

What one can see is that the ventures dependent on individual initiative have fared well. The entrepreneurs have, on their own, propelled the economy upwards despite the meddling by the government. In fact, in most cases of failure there is only one explanation: the government’s bungling. The Manmohan Singh rule did not take remedial measures when the faltering economy required correction. However loud the denial, the policy paralysis and slow decision-making are palpable.

Prime Minister Manmohan Singh is an economic wizard, but looks like King Canute who had placed his throne near the shore and vainly attempted to command the waves to recede until he almost drowned. The Prime Minister sees the demolition of India’s success story, but does not know how to pick up the pieces or from where to start. The main drawback is his inability to have his way. The recent budget is an example.

The prime minister reportedly proposed two or three measures to Finance Minister Pranab Mukherjee to perk the budget perk. But Mukherjee did not consider the proposals worth including in the budget. It is an open secret that the union cabinet lacks cohesion. Some ministers are not even on speaking terms. The estrangement between Mukherjee and Home Minister P. Chidambaram has come in the way of taking bold steps. The latter is Mukherjee’s predecessor and has different ideas about improving the economy.

The problem arises when Singh does not assert himself even when he realises that his cabinet colleagues are wrong and that the country needs such drastic steps which he had initiated in 1991 when he was the finance minister. He doesn’t seem to have his way even in small matters like the distribution of food grain because Agriculture Minister Sharad Pawar has his own ideas. Therefore, the government does not step in when a large quantity of (60,000 tonnes) of food grain, some of it as old as 15 years, is rotting while one third of India’s population is going to bed without food. The governments, both in the states and at the centre, have ignored even the Supreme Court’s order that food grains should be distributed among the poor and not allowed to rot.

However, the most important reason for the economy’s regression is the lack of political stability. Economics cannot be separated from politics. True, the government’s own allies are in the way. West Bengal Chief Minister Mamata Banerjee, who led the protest match in Kolkata, is not in favour of reducing subsidies which run into thousands of crores. Is it the coalition dharma (religion) that has made the government effete?

The government could have tried to reach a consensus with the BJP. The party, which has more numbers than the Congress in the Rajya Sabha, has been willing to give support to bills relating to insurance, pension and food security. But its complaint is that the Congress is divided on these measures and does not bring the bills to the House. For the sake of the nation, they will have to bury the hatchet on basic economic issues and jointly push the wheel of development out of the quagmire in which it is stuck. The country cannot afford to go back to the Hindu growth of 3.4 per cent.

However, it has become a fashion for western agencies to downgrade India because it is a free society and to extol China which is a dictatorship without any voice of the people. Even the United Nations Development Programme, which is supposed to be independent, has lectured the Indian government not to emphasise on “inclusive” growth because this would come a cropper. But this is one way to see the benefits of development reaching the poor. India still provides the West with a huge market to dump whatever it wants to.

One fears that the pressure to introduce more reforms may make the government relent in fields where the indigenous producers are strong. And what about the Indian corporate sector which has made all the money in the country and is now feverishly investing abroad?

India has to look within and find a solution to the problems itself. A nation’s assets are its people, not the government, which can be thrown out in elections. This reminds one of the words of former US president John F. Kennedy: “And so, my fellow Americans: ask not what your country can do for you — ask what you can do for your country. People in India need a similar approach.

Kuldip Nayar is a former Indian high commissioner to the United Kingdom and a former Rajya Sabha member.