Some thoughts for Manmohan Singh

In a week?s time, the Prime Minister will be addressing the nation for the second time from the historic ramparts of the Red Fort. His advisors will be busy on the speech content and fresh promises to be made. This is a good time to assess the past 12 months, a balance sheet of success and failures, going beyond the official publication titled ?A caring government?one year of UPA government.?

First and foremost, the country has seen a period of continued economic stability, free from communal passions and financial malfeasance spilling over into public life. This is no mean achievement.

Second, the Prime Minister?s achievements have been singular in his area of limited familiarity, viz., foreign policy, strategic relationship and defence agreements. The recent agreement with the US, enabling full access to fuel, spares and technology for civilian use of nuclear energy is far-reaching. Apart from its implications for energy security, it has broken the historical baggage of a mindset inherited for four decades in both countries. Conclusion of the Comprehensive Economic Cooperation Agreement with Singapore and work on regional co-operation with other Asian countries is creditable. Relations with China have substantially improved. Confidence-building measures and the ceasefire with Pakistan are holding, despite the recent disquiet on terrorism escalation. It is in the nature of things that irrespective of who sowed and nurtured the sprout, the usufruct is enjoyed by he who harvests.

Third, the Prime Minister?s forte is economic statesmanship. Yet, it is somewhat ironic that in contrast to what has been achieved in foreign policy and defence, successes in the economic sphere are more modest. The economy is doing remarkably well, but it is debatable if it can be attributed to government policies. Decisive measures on electricity reforms, labour reforms, privatisation, judicial reforms, coal, to name a random few, have eluded success. In its absence, it is difficult to assert with confidence that there is a vastly improved investment climate to spur investors, both domestic and foreign. Elaborate mechanisms like an Investment Commission, Infrastructure Committee, Special Purpose Vehicle, plus a host of many other commissions, task forces and high level committees have been constituted, but tangible outcomes are yet to be felt. Understandably, these take time. Civil aviation has, however, made decisive strides.

Fourth, energy security is the new global buzzword in an era of high fuel prices. Harnessing both conventional and non-conventional sources more aggressively is an integral part of the strategy. The new agreement with the US will help in mainstreaming nuclear energy in our overall policy. While it may be glamorous to seek petroleum alliances beyond our shores, making petroleum strategy an extension of foreign policy has limitations. It is certainly more fashionable to seek external agreements with Iran, Myanmar, Bangladesh and create an Asian buyers consortium, than to raise fuel prices. It helps deflect focus from difficult domestic decisions. However, no energy security can be guaranteed till energy is appropriately priced. The centrality of energy pricing by de-politicising price decisions, of creating institutional firewalls to minimise political interference through regulatory mechanisms, is inescapable.

So is the need for coal reforms. The obstinate bureaucracy of the ministry, compounded by the incompetence of successive coal ministers increase the challenge.

Fifth, weeding non-efficient ministers, whose names and numbers do not require IB sleuths, would enhance credence. Beyond civil service reform lies the need to reform government itself. A multiplicity of ministries with overlapping, if not redundant, functions and jealous guarding of turf impedes progress. For instance, creating an energy co-ordination committee is no substitute for putting coal and non-conventional energy in the ministry of power. Leaving textiles separate from commerce or petrochemicals separate from petroleum or food processing from agriculture are legacies that need no perpetuation. While the Planning Commission is being mainstreamed for broader economic policies, its basic restructuring is on the back-burner. In a coalition government, many hopefuls need accommodation. But at least a modest beginning can be made.

Sixth, the Prime Minister has rightly stressed the centrality of agriculture reforms and rejuvenating research to meet our new needs. A coherent strategy on agriculture covering Centre-state relations, earmarking responsibilities, legislative and administrative, could constitute a much-needed ?White Paper on agricultural reforms.? The present minister, whose responsibilities encompass the multiplicity of the agricultural divide, provides an opportunity, given his mindset, which is not to be foregone.

One other area deserves attention. The passage of a number of important Bills remains mired in controversies. There are others on which promises were made, but the laws are not in sight. The legislative record of this government needs improvement. Successful deal-making is what outcomes are all about.

So what should the Prime Minister say this August 15? He can take legitimate pride in many far-reaching achievements. But he must admit much more needs to be done on the economy, on improving governance, strengthening institutions, mainstreaming the lagging states. Coalition politics has limitations, but successive coalitions in the past have achieved notable reforms. We have one of the world?s best economists at the helm of affairs, but this has yielded the best outcomes only in foreign policy, security and defence. No doubt, governments must survive before they can reform. Fortunately, however, both the UPA chairperson and the Prime Minister are sensitive enough to realise survival is not an end in itself.