The recent Cabinet reshuffle?and the bigger one that is expected in March?must be viewed against the backdrop of some serious ideological pulls and pressures within the Congress party, which have by no means ended. Indeed, environment minister Jairam Ramesh?s newfound conciliatory stance towards projects such as Lavasa and mining at Niyamgiri only represents a temporary thaw in the larger ideological struggle within the Congress party. The contours of this larger battle of ideas will become clearer after a more substantial Cabinet reshuffle takes place.
It was hardly lost on anyone that Jairam chose to meet the head of the Vedanta group, Anil Agarwal, only two days before the Cabinet reshuffle was to happen. Later, he also met the promoters of the controversial Lavasa city development project and gave some assurances that the project could continue if some conditions were met.
The environment ministry is but an instrumentality, which an influential section of the Congress party has used to send a strong message to big business houses that it was not easy to set up projects without meeting the social and environmental costs arising out of it.
It also quite clear that an influential section of the Congress party, backed by the Gandhi family, wants to reopen the larger debate over whether pure growth-oriented reforms, which boost wealth creation by businesses, can be relied upon entirely to deliver equity and redistributive justice. The ongoing ideological struggle within the Congress seems centred on the theme of growth efficiency versus equity, and how to draw a balance between the two.
This ideological battle also possibly masks an intense power struggle between two groups within the Congress, seeking to give the grand old party a new direction. For instance, the sharp differences between the National Advisory Council (NAC) and the PM?s economic advisors over the implementation of the Food Security Act is just one small example of the raging ideological battle within the Congress.
In the Congress?s self-perception, Dr Manmohan Singh represents ideas that drive wealth creating reforms, with a focus on efficiency. Therefore, businesses have a high level of comfort with leaders who push the idea of wealth creation with efficiency. Some of Dr Manmohan Singh?s Cabinet colleagues like P Chidambaram, Kapil Sibal and Montek Singh Ahluwalia would also seem largely in tune with Manmohan?s thought processes. While the Congress party cannot do without the likes of Manmohan Singh and Chidambaram, it also makes sure that enough checks and balances are created in regard to the nature of purely growth-oriented reforms espoused by them. The logic being these reforms don?t necessarily impact the lives of the poor masses in any direct manner. So distributing subsidised food on a bigger scale or refining further the employment guarantee schemes are a bigger priority than other long-term growth-oriented reforms such as opening up the financial sector by amending antiquated laws.
To understand this phenomenon, one just has to examine how some very calculated checks and balances were created with the very composition of the Cabinet after UPA-2 came to power in 2009. In retrospect, the nature of the UPA Cabinet itself reflected the nuanced ideological differences playing out within the government from day one. This also flowed from the political reading that the Congress did well at the polls more because of its social sector programmes such as employment guarantee rather than all the pure growth-oriented reforms that help drive higher GDP growth.
Three important portfolios in the UPA Cabinet can be construed as having provided an ideological counterweight to the ?Manmohan doctrine? that there is no alternative to reforms that consistently drive growth and create wealth.
Pranab Mukherjee as finance minister is committed to growth but is far more nuanced about his emphasis on big bang reforms that drive growth. For instance, he has made it clear that further opening up of the financial sector through major legislative changes is not such a priority. He blames it on Mamata Banerjee but is himself convinced about it. Don?t forget his big praise for Indira Gandhi?s bank nationalisation in his budget speech.
Mind you, this is happening in spite of the President?s address to the joint session of Parliament, which greatly emphasised the need for financial sector reforms. The inputs for the President?s speech, regarded as a definitive policy statement of the government, was provided by the PMO.
So clearly, Pranab Mukherjee has played the role of somewhat softening Manmohanomics. Another minister chosen to play this role is obviously Jairam Ramesh. Pranab Mukherjee, being a seasoned politician, has the finesse of a goldsmith whereas Jairam behaves more like an ironsmith, with his crude and heavy-handed approach. More recently, Jairam was possibly asked to soften his strident pronouncements, which gave everyone the impression that India was about freezing all development projects.
Another key Cabinet minister not in sync at all with Dr Manmohan Singh?s thought process is defence minister AK Antony. Antony has openly opposed allowing any foreign investment, even with Indian control, in defence production. Besides, Antony is also very strongly opposed to the terms on which Americans want to sell billions of dollars of defence technology and equipment to India. This is one of the biggest pieces of the India-US strategic economic cooperation that President Obama and Manmohan Singh are committed to. But Antony is no mood to let this happen on the terms that the Americans are seeking.
In the recent Cabinet reshuffle, Jaipal Reddy?s appointment as petroleum minister is also aimed at tempering his predecessor?s excessive pro-business, even crony capitalist, approach. These are strong indicators of the new ideological tensions developing within the Congress. While the churn itself is understandable in any dynamic organisation, the Congress will have to bring some ideological clarity eventually.
?mk.venu@expressindia.com