Reforms without risk

After months of avoidable hesitation and procrastination the Manmohan Singh Government has decided to take the plunge and go in for crucial economic reforms which were waiting for nothing but a little courage and  a decision.

The decision to go in for FDI in retail and civil aviation is the beginning of a new set of reforms. More decisions are likely to be taken during the next few days irrespective of what  political parties like Mamata Banerjee’s Trinamool Congress may choose to do politically.

There are two major reasons for Dr Manmohan Singh for what he described as “biting the bullet”. One is his critics’ charge against his Government that there was policy paralysis in the government.  Somewhere the charge has stung.

The second is the economic reason and the fear that unless reforms are pushed through fast, economic growth, which not long ago had touched almost nine per cent, will at the end of the financial year be only a little above five percent.

This could lead to fall in employment across the country and the loss of lakhs of jobs. This in turn  will have political repercussions for the government which is to face elections in less than two years – 2014.

It is too clear that the government has done its political sums with care and come to the conclusion that even if a majority of the States don’t want FDI in retail, it will get away with the decision.

The government, it seems, does not apprehend any threat to its survival even if Mamata Banerjee’s Trinamool Congress chooses to walk out of the UPA.

It is difficult to read Mamata Banerjee’s mind but at worst she can pull her ministers out of the Manmohan Singh Government and continue to support the existence of the government at the Centre.

The Congress has reckoned that Mamata Banerjee cannot afford to jump on to the BJP’s bandwagon, just to spite the Manmohan Singh Government. This is because she cannot afford to lose the 25 per cent of the Muslim vote in her own State by siding with the BJP.

Also, the Congress must have been given assurance in private  by Mulayam Singh and Mayawati that the Samajwadi Party and Bahujan Samaj Party will not join those who want to topple the government at the Centre.

Essentially, neither of these two parties wants an early parliamentary poll whose results can be uncertain.  Whatever their stand on FDI in retail, these two parties also want to retain their distance from the BJP.

Even the BJP and other opposition parties  and groups have a problem in forcing an early election.  Their serving MPs in the Lok Sabha simply don’t want early parliamentary election and cutting short their own term.  They fear  the party leadership may not give them the ticket for the next election. And what  is the guarantee that even if they get the ticket from the party they will be elected by the people?

Apparently, Dr Manmohan Singh and the Congrss party have taken into their account that there is no risk to the survival of the government if they go ahead with economic reforms.

The positive reaction from the market to the government’s decision to induct FDI in retail and civil aviation has also strengthened the  belief that not only economic reforms will boost the  economic growth but  also will help the Congress party win over the middle class which has got alienated from it during the last two years, on the backfoot as the government was on the issue of corruption.

ANI, September 18, 2012