Within hours of winning the confidence motion in Parliament, ministers and the United Progressive Alliance’s (UPA) managers were talking of pushing forward economic reforms — reforms that had been stalled by the Left for four years. Perhaps they said too much, too late in the day.
On Monday, Bharatiya Janata Party (BJP) leader Sushma Swaraj ruled out any support to the UPA government in passing economic legislation in Parliament. For the record, Swaraj argued that a government that had secured a confidence motion by dubious means could expect no support from the BJP.
There are formidable obstacles that are likely to stall reforms. There’s hardly any time left to carry out them out. There are bits and pieces of disinvestment that are possible by executive action. For example, equity in public sector undertakings (PSUs) can be offloaded. But, given the state of the stock market right now, this seems to be a closed door.
Other disinvestments require parliamentary approval in the form of the repeal of Acts that created these PSUs in the Nehruvian age. Many such repeal Bills are yet to be drafted.
In addition, bureaucratic support is unlikely at this time. Disinvestment is a messy, technical procedure. Apart from the extra-parliamentary opposition by the Left, officials are wary of doing such jobs quickly. Such “undue haste” attracts vigilance probes, unwelcome questions from the comptroller and auditor general and other assorted problems.
Then, there’s the issue of political support for big-ticket legislative items such as pension, labour laws, etc. The BJP, and even the Congress’ allies, would be wary of such measures now that the elections are just ahead. While the economics of reforms is clear, that’s not how politicians think.
Their problem is who gets the credit for reforms (when the going is good) and the blame (when things go bad). With fears of markets overrunning the poor and the middle class never being addressed properly, the BJP feels it should not support the UPA on these reforms.
With elections close by, the BJP’s calculations are dictating its stand.
Has the UPA miscalculated the possibilities for economic reforms? Write to us at firstname.lastname@example.org