Cong’s Economic Proposal Avoids Cliches, Puts Private Sector First

I was forced to read the Congress’s economic resolution again to ensure that I hadn’t skipped these stock Congress phrases from the past, viz garibi hatao, socialism and “poverty alleviation programs”.

Yes! My eyes had not been deceived. These tired shibboleths did not find even one mention in the crisply written and expertly curated (no typos or unseemly para misalignment! A welcome whiff of professionalism) 12-page document.

There was a young and modern turn of phrase in the document. I can detect some green shoots of promising policy discontinuities.

Here’s an extract:

Good, productive jobs can be created in large numbers by India’s private sector driven by trade,manufacturing, construction, and exports. The Indian National Congress resolves to win back economic freedom for India’s entrepreneurs.

The document further goes on to state that, “Sustained economic growth is the path toward becoming a middle-income developed country. It is the path to lifting the poor out of poverty. It is the path toward creating a large, vibrant, and productive middle class. It is the path to creating wealth.”

Whoa! The primacy given to the private sector in creating jobs (the omission of the public sector in this context is a refreshing acknowledgement, via the silence, about the abysmal productivity of government equity capital in commercial activities); the focus on wealth creation by a vibrant middle class, not as an anonymous footnote but as a vocal and upfront ambition; clearly an incipient attempt to discard clichés.

Now, let’s not get carried away believing it’s a revolutionary document which is completely abrogating the past and taking off on an entirely new flight of entrepreneurship and privatisation. It simply cannot, and more importantly, should not advocate such an abrupt reversal. That would be catastrophic.

For one, there are huge swathes of India’s economy, especially in the social and agrarian sectors, where the State must increase its capacity to intervene and force accelerated targets.

For another, you cannot have U-turns in a plural, noisy democracy like India (please attribute this gem of wisdom to former prime minister Narasimha Rao, the architect of the most discontinuous economic change in independent India when he unflinchingly/politically backed Manmohan Singh’s “brutal” twin rupee devaluations, de-licensing, and globalisation of India’s autarchic economy in 1991).

Even on the holy cow of the public sector, the document says: State ownership of businesses in certain critical sectors such as defence production, mass transportation, natural resources and financial services is both needed and justified. 

There is a rather business-like brevity. The fact that only four sectors have been mentioned could be telling. Is this a straw in the wind to test the rapid privatisation of public sector units outside these four sectors? One would honestly pray for that to be the case.

On the crisis in banking, GST, Aadhaar, agricultural tariffs – in so many areas, there seems to be a willingness to try out new, more market-oriented solutions.

But this economic resolution is currently a collection of words, and words are easy, especially when you are in the Opposition.

Having said that, all planned change does begin with words that outline a new blueprint. The Congress party could easily have dusted up and trotted out old inanities. The fact that it did not and chose to float some “half out of the box” thoughts, is cause for “half optimism”. The other half will happen when Rahul’s Congress begins to “act the resolve”!

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