New Delhi: He blamed the opposition for holding up economic reforms, he blamed the compulsions of coalition politics for corruption, and he just about refused to take responsibility for everything—and so, Prime Minister Manmohan Singh’s meeting with television journalists failed to enthuse investors, the stock markets, political analysts, and, expectedly, the opposition parties.
The Sensex, the benchmark index of the Bombay Stock Exchange, moved in a narrow 100-point range during the interaction that didn’t see Singh say anything he already hasn’t on the two main issues facing the government and the country: inflation and corruption.
“Today is not enough. It needs to be followed up with several more steps. Hopefully, the next one will be a JPC (a parliamentary probe into alleged corruption in the way telecom licences were handed to companies),” said Andrew Holland, chief executive officer of equities at Ambit Capital Pvt. Ltd in Mumbai.
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Holland articulated the fear of most people who do business in India, that the image of a corrupt government would discourage foreign investors. “Companies outside India who are looking to invest (in the country) would be looking at these issues (related to corruption) closely... Investments have slowed since November, especially in infrastructure contracts,” he said.
The telecom controversy has rocked Parliament for months, caused months of paralysis in policymaking and rattled the stock markets. Singh’s finger-pointing exercise at the opposition could queer the pitch ahead of the crucial session when the annual budget is presented and discussed; over the past few days, the government appeared to have cleared the way for business to be done in this session by agreeing to a parliamentary probe into the telecom controversy
Nitin Gadkari, president of the opposition Bharatiya Janata Party termed Singh’s comments “disappointing” and Communist Party of India member Sitaram Yechury said Singh had “virtually thrown up his hands” on “two vital issues confronting the nation”, “corruption” and “price rise”.
Singh did try to do his bit during the meeting. He promised a fresh wave of reforms, indicated that the Union budget could offer some palliative to encourage growth, and emphasized that he was not going anywhere and would “stay the course”. He also said that inflation would be “no more than 7%” by the end of March, down from around 8.23% in January.
“Whatever some people may say, that we are a lame duck government, that I am a lame duck Prime Minister, we take our job very seriously,” an often frail-looking Singh, 78, said in the meeting, organized to improve his worsening image.
That objective wasn’t met, said a political analyst.
“I think he has not come out as a decisive or assertive Prime Minister,” said N. Bhaskara Rao, psephologist and chairman of Centre for Media Studies, a Delhi-based think tank.
The telecom controversy, which Singh passed off as a consequence of coalition politics (former telecom minister A. Raja, now in the custody of the country’s federal investigative agency belongs to the Dravida Munnetra Kazhagam, a partner of the Congress in the United Progressive Alliance, or UPA, government), isn’t the only crisis the government has weathered in recent months. Maharashtra’s Congress chief minister had to resign after it came to light that flats meant for war widows had been allotted to politicians and their kin, and senior army officers. And the head of the organizing committee of the Commonwealth Games held last October, Suresh Kalmadi, a Congress member, is being investigated over corruption surrounding the event.
The UPA has also faced popular and political ire over rising food prices; food inflation was at 15.6% in January. And businessmen are worried about the lack of reform, though Singh attributed this to the opposition’s unwillingness to let Parliament do its business in the case of the goods and services tax, which will create a unified market.
Pratap Bhanu Mehta, president of New Delhi-based think tank Centre for Policy Research, said that while the Prime Minister’s meeting did not clear the air on several issues entirely, it did indicate the government’s endorsement of the way the telecom licences were issued. “It shows that the government had endorsed the policy” adopted by then telecom minister Raja, he said.
Mehta added that Singh’s meeting did seem to set the ground for a turnaround. “It also looks like he is preparing the ground to say that we are in the process of correction, we have taken action against those who were involved in corruption...and we are now focused on the big picture,” he said.
Both Mehta and Rao said Singh’s statements would have gone down well had they come earlier.
Alistair Scrutton and Paul de Bendern of Reuters, Asit Ranjan Mishra of Mint and PTI contributed to this story.