Now, reform

Written by The Financial Express | Updated: May 18 2009, 04:19am hrs
Election 2009 has probably delivered the best ever political context for economic reform. A reformist, economically literate and economically liberal Prime Minister is back with a hugely enhanced personal-political stature. His core economic policy team has gained in stature as well. Therefore, opposition from within the Congress to reforms will be muted. There will be no opposition from outsidethe communists are out of influence and out of reckoning. They will be back to organising ineffectual strikes protesting inevitable changes. Indeed, it is striking that the two leaders who targeted Manmohan Singh as an individual have both had a bad election: LK Advanis leadership is under severe scrutiny as the BJPs numbers sink to a new low and Prakash Karat must explain the vanishingly small returns to his ideological brinkmanship. Dr Singhs personal profile right now looks even more impressive when set against these twos troubles. The PM also has the advantage of post-result political analyses being free of false theories about voter preferences against reforms. The 2004 Congress victory was complicated by such a theory. No such fanciful reasoning is possible this time. The substantive reasoning should be this: as Dr Singh will know better than most, the economy needs a few mood- and investment climate-changing policy initiatives quickly. The PM has the political capital to deliver this now.

Some of the errors of the last policymaking apparatus can and should be avoided this time. Economic ministries and the education ministry should have high-calibre candidates. We can be fairly sure about the finance ministryall post-1991 FMs have been well chosen. But for other ministries, merit must be made to count now that the Congress is on a stronger wicket in the UPA, and within the Congress, the non-performing gerontocracy is on a weaker wicket. Ideally, the PMs right to veto all ministerial appointments should be reasserted; allies may get to pick their ministries after negotiations, but the allys nominee should have the PMs minimum confidence. Again, in coalition politics, there has rarely been a better time than this to test the acceptability of this very reasonable proposal. Dr Singhs toughening as a politician started with his stand and his winning gamble on the nuclear deal trust vote. Returning as an incumbenta rare thing at the national levelmakes him an even more formidable politician. The politician Dr Singh must now aid the economist Dr Singh.