With the Aam Aadmi Party showering freebies in just the few days it has been in office, the UPA looking like it is going to raise the cap on subsidised LPG cylinders once again, from 9 to 12 a year—and even possibly relooking this week’s R220 per cylinder hike in prices of non-subsidised cylinders—and Prime Minister Manmohan Singh announcing his retirement from politics, it is fair to say election season is upon us. Dr Singh, it is well known, has been a reluctant reformer as the Prime Minister and a pale shadow of his former self. As Narasimha Rao’s finance minister, he unshackled India and, it is no exaggeration to say, he let a million dreams flower. Whether this was done by realigning the rupee to give a boost to exports, or fixing tax distortions or delicensing industry or liberalising capital markets, Dr Singh did it all with panache.
As Prime Minister, though the arrangement with party chief Sonia Gandhi was meant to insulate him from the daily grind of politics, this never really happened. If it wasn’t the Left parties that were hamstringing him, it was Gandhi’s social agenda with Jairam Ramesh, and later Jayanthi Natarajan, playing a useful foil in the environment ministry, protecting the rights of forest dwellers and others against what the NAC-crowd generally viewed as industrial marauders.
Needless to say, the last decade of the UPA did see significant reforms, whether on allowing FDI in retail, opening up the aviation sector or pushing PPP as a legitimate form of investment activity. The problem, however, was that these weren’t pursued with the same vigour as the NAC-favourites, be they the Right to Information Act, the Right to Education Act, the Food Security Act, the Mahatma Gandhi National Rural Employment Guarantee Act. If one number sums up the government’s overall direction, and pace, it was expenditure on subsidies. While around 2% of India’s GDP was spent in this fashion in the pre-1991 era, Dr Singh’s biggest contribution—through cutting subsidies and by expanding GDP—was to reduce this to around half by the time he was done at the finance ministry.