Reading between Manmohan Singh’s lines – 1

Cautious optimism on the economy

Prime Minister Manmohan Singh performed an impressive act of camouflaging some very progressive and free-market ideas within the context of leftist verbiage. It will require a lot of political resolve to ensure that his coalition partners do not turn the tables on him by camouflaging a leftist agenda within Manmohan Singh’s good intentions.

The Indian farmer has also suffered from too many controls and restrictions. There are still far too many internal barriers to trade that must go. We must also re-examine those aspects of our policies that prevent a creative interaction between farmers and agro- industries. I would like to see the creation of a “Single Market” across the country for both manufactured and agricultural produce with encouragement of agro-industry linkages. With the introduction of value-added taxation this integration of the Indian market will be further enabled.

Manmohan Singh use of the phrase “creative interaction” as an euphemism for the free-market is similar to Jiang Zemin’s coining of the phrase “advanced productive forces” as an euphemism for capitalists so that it could be enshrined within the Communist party’s constitution. The absence of an efficient market mechanism for agriculture is one major reason why rural India feels left out of the ‘shining’ India. Delivering on this promise could well be the biggest of Manmohan Singh’s challenges and the most profound of his achievements.

Higher rates of economic growth, urbanization and the modernization of agriculture will continue to increase the demand for energy. This demand can only be met with new investment, increased efficiency and rational pricing. Even as we plan to make more efficient use of conventional sources of energy, we must invest in the development of non-conventional sources. We will evolve an Energy Policy package that will cover all sources of energy and will address all aspects like energy security, access and availability, affordability and pricing, efficiency and environment. [The Hindu]

A whole lot of motherhood statements on energy policy, but no specific direction except for the rational pricing bit. Rational pricing should mean jettisoning populist schemes like free power for agriculture or rural areas; but getting over rural India’s addiction to such freebies will not be easy for a government which came to power on the back of rash promises and rasher personalities.

The government will reverse the neglect of public investment in irrigation, addressing the specific problems of each river basin, in an environment and people friendly manner.

We will make public hospitals more efficient and accessible, through public-private partnership aimed at offering affordable and humane health care. [The Hindu]

Further public investment in irrigation is a welcome move; provided it is accompanied by a sensible water pricing policy that aims at recouping the investments in the long term. Similarly in healthcare, a public-private partnership should aim to put in place a modern healthcare system: with mandatory health insurance (potentially underwritten by the government) coupled with private-sector involvement in the state healthcare system.

Our economy has been rapidly integrating with the global economy over the past decade, with a growing sense of self-confidence. However, domestic enterprise needs world class and cost-effective infrastructure. Better roads, better connectivity, modern airports and railways, efficient ports and affordable and reliable power are all the basic requirements for a competitive economy. For centuries India has been a trading nation, actively engaged in the movement of goods and people across continents and high seas. We will pursue policies that enable our economy to be better integrated with the world economy without hurting the interests of our people. We will create an environment conducive to the utilization of the talent pool of the vast and diverse Indian diaspora. We greatly value their participation in the development of our nation. [The Hindu]

Yes, Prime Minister! Yes! In the absence of further details, the only information we have is of Indian railway passengers forced to drink their tea from earthern-ware kullars that the mercurial Railway Minister has imposed on a shocked nation. Roads, railways and airports must first be optimised for their primary purpose, before seeing them as tools to achieve social and political objectives.

Cutting it down to size

Nothing in the Prime Minister’s speech suggested that he is about to trim government. The length of red tape is proportional to the numerical strength of the council of ministers, as is the depth of the fiscal deficit. There are too many ministries and departments intruding into too many areas of personal and commercial life. While it would be unrealistic to have expected Dr Singh to implement radical reforms, he should at least have made some motherhood statements about a leaner government.