To those of us who read Indian newspapers regularly, India is at the near-centre, if not at the centre, of the world. The cold fact is that India is not at the near-centre of the world.
If we read Indian newspapers, we would be perfectly justified in the belief that Prime Minister Atal Behari Vajpayee virtually dominated the recent G-8 meeting and the tri-centenary celebrations in St Petersburg, Russia.
We would also be justified in the belief that Mr Vajpayees brief meeting with President Hu of China actually rung in a new Asian century. My rather unkind comments have nothing to do with Mr Vajpayee or the BJP or the NDA government. On the contrary, after a long interval, we have in Mr Vajpayee a leader who, on his visits to foreign countries, carries the office of Prime Minister of India with grace and dignity. The problem is not with Mr Vajpayee; it is with India, our self-doubts and our self-image.
There was a time when Jawaharlal Nehru dominated the world scene as a peacemaker. At that time, the world was divided into two camps implacably hostile to each other. Furthermore, thanks to Gandhiji, India occupied the high moral ground and from that moral perch India could play the roles of preacher, pontiff and peacemaker. If Korea or Cambodia required a Chair for a commission, India was the obvious choice.
If a strife-torn African country needed a General to head a peace-keeping force, an Indian was the first choice. In the 1960s, India ceased to occupy the high moral ground. Indias troubles with Pakistan and China pushed the country into a corner.
Among the factors that have pulled down India, I would, without hesitation, put at the very top Indias seeming inability or unwillingness to resolve the dispute over Kashmir in a manner that would be acceptable to the rest of the world. More than Indias problems with its neighbours, it is Indias inability to pull itself out of the morass of poverty that has cost the country its due place in the world.
In 1991, by accident or design, India stumbled upon a path of economic growth. The credit, of course, goes to the Congress party. The first six years put the country firmly (or so we thought) on the path of high growth. The years 1994-95, 1995-96 and 1996-97 were the golden years of economic management. The BJP, which succeeded the United Front, had, comparatively speaking, less baggage and ought, therefore, to have forged ahead. There was a new consensus among the political parties and it only needed new ideas, a new team and renewed vigour to maintain the high rate of growth.
Regrettably, both the BJP and the Congress have, in different measures, failed the people of the country. The BJP, as the party in government, should bear responsibility for pushing the country back to the days of high fiscal deficit, low growth, stagnant employment and high inflation. The Congress, as the party in opposition, should take responsibility for falling into the trap of pro-poor policies and eroding the consensus on economic reforms that it had helped to build during the early 1990s.
In my view, both parties, at least at the intellectual level, remain committed to economic reforms. The tragedy is that, purely for political reasons, instead of enlarging the areas of agreement, they are expanding the area of disagreement and sharpening the points of confrontation. Unwittingly, both parties have yielded a lot of space to those who are opposed to radical economic reforms.
In the case of the Congress, its defeat in three successive elections (1996, 1998 and 1999) has made it a reluctant protagonist of reforms. While the state chief ministers belonging to the Congress are pressing ahead on reforms, the Congress party in Parliament has adopted an ambivalent attitude towards the second generation of reforms. For example, the Congress is opposed to the dilution of government equity in banks to 33 per cent. It is opposed to the privatisation of profit-making public sector enterprises, regardless of the fact that there are no strategic or security implications in the proposed privatisation. On the introduction of VAT, the Congress continues to speak in more than one voice. On crucial issues such as down-sizing government, labour reforms and gradual withdrawal of non-merit subsidies, the Congress prefers to remain silent. In my view, the Congress willingness to endorse broader and deeper economic reforms is impaired by its assessment of its own electability.
The BJPs stance is more perplexing. Its historical position was that it was opposed to the Congress socialist policies. Its National Agenda for Governance accepts the free market system and allows a large space for the private sector. Yet, it is not willing to implement the second generation of economic reforms. In my view, the BJPs limitations are attributable to the fact that it has few men and women who have the understanding and capability to implement reform measures. Many leaders of the BJP, and almost the whole of its rank and file, are comfortable with the social agenda of the BJP and have little concern or use for an economic programme. Besides, having enjoyed power for five years, there are players in key positions in the BJP-led government who see the advantages of control and rent-seeking.
The result is the uneven record of growth since 1997-98. The saving grace is that even with indifferent monsoons and indifferent governance, Indias GDP continues to grow at an average of 5 per cent a year. Congress and the BJP will be the two parties in government in the foreseeable future. Hence, both parties must realise their responsibilities. There are many things to be done, many wrongs to be undone and many goals to be achieved. The tryst with destiny, foretold by Jawaharlal Nehru, is still not at hand.
(The author is a former Union finance minister)