Union Finance Minister P Chidambaram, who went to Hong Kong and Singapore recently to woo foreign investment, recently remarked that political instability is the biggest obstacle in the way of economic reforms in India. He had made a similar comment in 2008 also.
Apparently, Chidambaram's words seem to be right. Political consensus is indeed very important for a nation to march forward. The minister's words sounded all the more perfect in Singapore, considered the cleanest country in the world and also economically one of the most developed. Perhaps Chidambaram was ruing the cost that a pluralist democracy demands. But was he factually correct while making such observation?
Whenever India has taken the path of economic reforms, the political situation was not conducive for those who took the call. In 1991, when the Narasimha Rao-Manmohan Singh duo took the first step towards liberalisation, the Congress government was a minority. In 1997, when Chidambaram himself had presented the Dream Budget, in which he had presented a roadmap for economic reforms, India was witnessing a phase of great political instability.
Even during the time of the UPA, the central government faced stiff challenge in each of its two terms on the question of reforms. The Left Front had pulled out on the question of nuclear deal with the US in 2008 while the Trinamool Congress quit the government on the issue of economic reforms last year. But yet, the flow of economic reforms was not stemmed. Chidambaram's analysis, hence, does not fit with the historical turn of events.
Chidamabarm, like several other Congressmen, might also dream about the resurgence of the golden age when the party had ruled the country single-handedly. The party, which has reluctantly learnt the facts of coalition politics, something that can be ignored today, perhaps still believe that it would achieve its desired goals in economic reforms if it was free of political compulsions. But the irony is: the Congress, from the days of Jawaharlal Nehru till Rajiv Gandhi, the last of the prime ministers who enjoyed an absolute majority in India, did not undertake any reforms that would justify Chidambaram's viewpoint. India, we all know, witnessed a 'Hindu rate of growth' despite a great political stability.
This raises the question: How do we relate economics with politics then? If smooth politics only ensures smooth economics, then the chances of our progress look very remote. The two issues are actually inversely proportional, the history of India says so. The key issue that we are missing here is that we must widen the base of forming political coalitions today.
The only mantra of forming coalition should not be just 'join hands with the enemy's enemy' but rather include economic issues that are vital for the nation's interest. And for doing that job, it is important that the top leaders of bigger coalition partners learn to share things with the lesser partners.
It is often heard that the Congress never speaks with the lesser partners while taking a decision and ignores the Opposition also. Has Chidambaram spared a thought about the fact that his party has not succeeded to forge a true alliance with its allies? The Congress is just taking advantage of the fact that most of the smaller parties want to avoid the BJP for they care the most about their minority vote-bank. But within the coalition, there is hardly any effort to pursue the Jot Dharma (principles of coalition).
Atal Bihari Vajpayee led a strong coalition despite the fact that he was a BJP prime minister and yet favoured reforms. The reason: He knew the art of coalition-building. The current government led by Manmohan Singh prefers to keep quiet most of the time, leave apart talking to coalition partners or the Opposition, and dreams about an opposition-free polity.
Chidambaram should have known that reforms also form a part of governance and the latter becomes a true story only when there is a sound leadership. The UPA government is talking about reforms now to tame the strong anti-incumbent mood. Had it been really eager, the groundwork would have started much before. Blaming political instability for the failure to push reforms is not a wise thing to do. Is Chidambaram sleeping with his eyes open?