Anil Padmanabhan on why the period between 2004 and 2014, presided over by Prime Minister Manmohan Singh, is India's lost decade
Last week, addressing his third press conference in 10 years, prime minister Manmohan Singh, responding to a provocative question on the legacy of corruption that has dogged the Congress-led United Progressive Alliance (UPA), said: “As far as the charges of corruption are concerned, most of these charges relate to the period of UPA-1 (his government’s first stint in power between 2004 and 2009). Coal block allocation as well as 2G spectrum allocation were both in the era of the UPA-1. We went to the electorate (in 2009) on the basis of our performance in that period, and the people of India gave us the mandate to govern for another five years."
It was evident where he was heading and he didn’t disappoint.
“So, whether these issues, which have been raised from time to time by the media, sometimes by the CAG (Comptroller and Auditor General), sometimes by court, one must never forget that they belong to a period which was not the period of the UPA-2, but the period relating to the previous five years, and the people of India entrusted us with new responsibilities. So the people of India do not seem to have paid heed to all these charges of corruption which are levied against me or my party."
Singh’s statement smacked of denial. And the cynicism underlying it left most people stunned. One expected a defensive response (of the indefensible) to the question, given his government’s abysmal record, not a piece of sophistry. Here was a regime that had been ushered into power, not once but twice (and with such hope and expectations the second time), and which boasted, at least on paper, some of the finest public administrators of our times.
Not only did it not deliver on the potential, but it also let the economy slip—the UPA inherited an economy that was growing at 7% in 2004-05, and it will bequeath to the next government, a growth rate that is likely to drop below 5%.
The period between 2004 and 2014 is truly India’s lost decade.
The UPA will be judged—by history as the PM claimed—for not what it did, but for what it didn’t do. I have previously written that (http://www.livemint.com/legacy) no Prime Minister in the history of modern India had the credentials of Singh. As a politician, he had the best exposure as leader of the opposition in the Rajya Sabha and, in the 1990s, as finance minister. As a policy wonk, there is not one important post in government that Singh missed out on—he was chairman of the University Grants Commission, adviser to the prime minister, Reserve Bank of India governor, deputy chairman of the Planning Commission, and chief economic adviser.
Yet, this is the man who has presided over a decade of lost opportunities.
I am sure the government or, at the least, the Prime Minister’s handlers, will contest this.
Yes, materially we are better off as a country. As the trading up series that Mint published (http://www.livemint.com/trading-up) revealed the people of this country are far better off than they were at the turn of the Millennium. People who were walking are now cycling, those using two wheelers have graduated to four wheelers. Similarly, those drawing water from a pond, now draw from a well, while those drawing water from one community tap now get piped water at their homes. Together with the entitlement regime that the UPA propagated—guaranteeing rural jobs, education, information and, most recently, food security—this has ensured that the level of poverty dropped to a historic low of 22%.
However, this material progress stops here. Entitlements do not and cannot satisfy aspirations.
Unfortunately, this approach came at a time when the country’s demography underwent a structural change with 65% of its 1.2 billion people being less than 35 years old.
The best way to meet aspirations and guarantee growth (both personal and national) would have been to train people and later provide them with jobs. The UPA dropped the ball on this. Its efforts to overhaul education through legislation got mired in the political gridlock in Parliament; this nixed efforts to bring in transparent regulation of higher education. Its much acclaimed Right to Education ended up achieving enrolment, but failed to deliver on quality. A focus on skill development has remained more about talk than action.
The government’s record on the jobs front has been abysmal. But for the rebound in the last two years, the UPA would have gone out with probably the worst record of any government in job creation. In the two years ended 2011-12, the Indian economy, according to the National Sample Survey Office (NSSO), added 14 million jobs to the workforce. According to the earlier, 66th round survey of the NSSO, the economy added a mere 1 million jobs in the five years ended 2009-10.
Effectively, in eight out of its 10 years in power, for which data is available, the UPA has created 15 million jobs. (Since the Prime Minister’s Office loves to compare its growth figures with those of the preceding regime headed by the Bharatiya Janata Party, it would be worth pointing out that between 1999-2000 and 2004-05, 58 million jobs were created.) In contrast, the country adds 12 million people to the labour force every year. Leave alone absorbing new job claimants, the economy is nowhere close to clearing the backlog of unemployed.
Like the Prime Minister’s defensive response at his press conference, the UPA has spent a large part of its time and energy in denying the employment numbers. One would have expected instead an effort to own responsibility and evolve a structural fix to the problem.
This is exactly why the UPA is being judged harshly. It can still make a fresh beginning if it admits to its lapse rather than resorting to sophistry. As the recent state elections show, people do pay heed to non-performance.