Now, reform

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The Financial Express: May 17 2009, 22:49 IST

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 outside—the 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 Advani’s leadership is under severe scrutiny as the BJP’s numbers sink to a new low and Prakash Karat must explain the vanishingly small returns to his ideological brinkmanship. Dr Singh’s personal profile right now looks even more impressive when set against these two’s 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

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