Encore, please

Why the assertiveness now?

That it is in the specific context of the nuclear accord reflects diverse possibilities. Either the PM just reached a tipping point. Or, he takes the success of this deal, where he was the catalyst, as having serious ramifications for his stature as a leader, at home and abroad. Or, he holds foreign policy far closer to his heart than economic policy. Or, there’s a strategy behind it —if the trigger is pulled now, the Congress feels it stands a better chance in mid-term elections, given the internal problems and declining popularity of other national parties.

We, of course, hope this episode is a turnaround—that the government will now assert itself on other, crucial reforms in the economic sphere.

The Manmohan Singh government’s lack of spine in the face of the regressive attitude of its Left allies on economic matters has been a costly affair. For instance, the resistance to raising foreign direct investment limits—particularly in insurance, this leaves the industry with little recourse to long-term funds; the stalling of pension reforms has serious repercussions for the fisc.

Indeed, even in the absence of real confrontation, in what seems sheer fear of the Left, myopic decisions have been taken. For instance, the cap on the size of SEZs—a mockery of the concept itself; or the blocking of Starbucks from entering as a single-brand retail franchise even as other single brand retail has already come in. Mishandling of the former has direct opportunity costs and the latter sends the wrong signal to the investor community, and is thereby an indirect cost. Signals on disinvestment in the public sector are equally dismal. Look no further than the proposal to offload 10% of the fully government-owned OIL India’s equity as private placement to other oil PSUs rather than making a public offer. If additional 10% equity can be raised from the market, why could this 10% (and indeed, more) not have been offered there?

These are but a few recent instances where economic policy has been allowed to be held ransom by the Left’s politics. We know how price controls and ballooning subsidies in petro-products, foodgrain, etc., have cost the exechequer, and thereby the taxpayer. Can the PM take a strong stand on economic policy now?

The immediate need, of course, is to apprise the nation of the relevance of his stand on the nuclear issue. Through Monday’s statement and the subsequent debate in Parliament, he should explain what his realistic expectations are and how it touches the common man, while he addresses all, rational, concerns of the country’s elected representatives. We emphasize ‘rational’, since the Left is prone to irresponsible perpetuation of its ideological rigidities— anti-US, pro-China, et al. We emphasize ‘realistic’, as too many people have voiced exaggerated expectations, both adverse and advantageous.

Note that for an energy-guzzling economy, any breakthrough on diversifying the energy basket is a step towards improving energy security. So, he must explain how raising the nuclear power share from 3% now to, say, 15% makes this deal worthwhile; and if he envisages that private nuclear power projects will reduce the risk of uranium supply disruption. Indeed, he needs to go clause by clause and explain his government’s valid interpretations.

Even as we have faith that the negotiators have done their best in getting us a good deal on nuclear power, the fine print that raised too many dissenting voices should be demystified. Perception is as important as the truth here.

Can we expect a real shift in the PM’s approach to the Left’s pressure tactics? Write to us at views@livemint.com

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