If there is one thing about the move to allow foreign investment in domestic retail on which there is near consensus, it is on the confusion about the timing of the policy change. Regardless of their ideological hue, supporters or opponents, almost everyone, barring the caucus that pushed the idea, is surprised as to why the government would have chosen the start of the winter session of Parliament to launch what is undoubtedly the most disruptive reform initiated ever.
Some writers and politicians have already drawn our attention to the distraction the move has provided, drawing the media and national attention away from two pressing issues: inflation and corruption. Extending this logic further, it can be safely surmised that the Congress-led United Progressive Alliance (UPA) has turned (or at least trying to turn) a corner in its strategic management of public opinion.
After being bruised for the most of the past one year by charges of corruption and economic mismanagement in tackling rampant inflation, the UPA was visibly dazed; lurching from one crisis to another and the opposition to it, inspired by social activist Anna Hazare, dangerously spreading to beyond organized politics. It is almost unanimous that in its second term, the UPA has been reduced to firefighting and had little or no time to focus on the promises it had made when re-elected in 2009.
Now, somewhere within the government, someone has come to the conclusion that if indeed the UPA’s destiny is to fight fires, then it might as well be those of their own making. That is, create a problem and then spend your time in resolving the problem. Other writers have, over the last two years, already dwelled on the fact that the UPA is dominated (and in several instances led) by the bureaucracy. Take the two together and we have our perfect conspiracy theory to explain the timing of the policy change.
This is classic bureaucracy, immortalized in the satirical television series, Yes Minister, broadcast by the BBC in the 1980s. Though it was set in Britain, it very much is a reality that shows up the machinations of the bureaucracy and politicians.
Just look back at the last 11 months and the logic will be even more compelling. Beginning with the alleged scam in the sale of second-generation (2G) licences, the UPA has been repeatedly buffeted by damaging claims levelled by the Comptroller and Auditor General (CAG) of India. Not only did CAG raise the red flag on the sale of telecom licences, it has also passed strictures on the disastrous conduct of the Commonwealth Games, for squandering of public money for the purchase of aircraft by Air India and on the decision to allow the building of a multi-storeyed residential complex (the Adarsh housing scam) on land owned by the defence ministry in south Mumbai.
But probably none indicted the government more than its mishandling of Hazare’s protests. At first it simply ignored the problem—and also sought to vilify him—and then later tried to muzzle the protests by arresting Hazare. This incredibly daft move rightly backfired, leaving the government looking like a bully whose nose had been bloodied. Exhibiting a similar error of judgement, the UPA treated yoga guru Ramdev’s brand of activism against corruption with kid gloves; a group of ministers led by finance minister Pranab Mukherjee, in full public gaze, met up with Ramdev at the airport and tried to dissuade him from the fast. Finally, when they did get tough, it was another ham-handed display of state power that alienated the UPA even more after some innocents were injured in police action.
In this entire period, the UPA was but a bystander and just seeking to douse the fire. It was never setting the agenda. Instead, it was busy eroding its social capital trying to talk its way out of the problem rather than fixing it. Inevitably, the going just got worse for it with every setback.
By launching such a controversial reform at the beginning of Parliament session was like waving a red flag. Since no one from the caucus that pushed the package will speak to us, one can only surmise that it was designed to retake the initiative. The UPA probably did anticipate the opposition’s response, but was probably blindsided on the opposition from within. In an interview published in The Economic Times on Saturday, railway minister and Trinamool Congress parliamentarian Dinesh Trivedi detailed how his point of view was muzzled. Worse, he revealed the inner workings of the UPA II cabinet, wherein an opportunity was denied by a virtual fait accompli—crucial papers were circulated only hours before the cabinet met.
Which brings us to the final point. It is all well to have a strategy of setting off your own fire, provided one possesses the skills to douse it. In the last two years, the UPA has come across as a dysfunctional lot, after seemingly having lost its way. And the manner in which the proposal is threatening to unravel suggests the obvious lesson: if you can’t do good, do no harm.
Anil Padmanabhan is a deputy managing editor of Mint and writes every week on the intersection of politics and economics.
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