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Start and stop reform process: Mamta stops the pension bill attempt once again ..




For the past months (and even years), the present Government has been in a policy stupor. After the exposure of scams of various types and the battering of the reputation of the Government, there is a fear of taking major policy announcements for fear of attracting unwanted attention. So, some time ago, there were reports in the papers about how ministers would not commit to policy actions, seeing more safety in not taking any action, and the bureaucracy learned quickly, refusing to take actions for which they could be held accountable later. Further, the jailing of the telecom secretary for involvement in the 2G scam also had a major effect on the babudom since the main culprit seemed to be Raja.
The allies learnt quickly that this was a Government that was highly susceptible to pressure and applied this pressure in all sorts of ways. Some of the allies (or supporters rather than allies) such as Mayawati and Mulayam Singh Yadav could be managed with reminders about the CBI probes against them; and then they ran into an ally who did not have such important cases that could be leveraged – Mamta Banerjee. Further, Mamta Banerjee did not fit into the traditional mode of politicians who could be managed and cajoled into supporting the policies of the Government. Mamta has some views of her own, which are in the nature of populist views and if they clash with economic necessities, then the populist measures should win.

There are many countries in the world which run on coalition politics, with even opposed parties taking part in a coalition (consider the United Kingdom where the coalition partners are very different from each other); there is a certain amount of cajoling and discussion required for making coalitions work. In the light of several measures that have been seen with respect to the Congress brand of politics, there does not seem to be an effort made to reach out to coalition allies and get them on the same page with respect to the need for such policies.
For many months now, the Congress has been hit with cries of policy paralysis, with research stating that the economy seems to have become less attractive for foreign (actually even from Indian companies) investment, that policies of the Government are scaring off investment rather than attracting such investment, and the growth rate is the lowest for many years. There are appeals by business leaders and by the media for the supposedly ‘economist’ Prime Minister to live up to his reputation and do something to arrest the fall in the economy. So what happens ?
The Government announces new measures for investment in infrastructure and for financial reform, starting with the pension bill. Now, the BJP has promised support for the Bill; so there is no problem with respect to the numbers for support, but for Mamta Banerjee, it seems to be the privatization of pension security and hence there has to be total opposition to the bill and presto, the Cabinet decides to defer the introduction of the bill.
I am not going to talk about the merits or demerits of the bill, but the Government should have been clear from the beginning that Mamta Banerjee would not support the bill, and since the support of Mamta is crucial, the bill was deferred, resulting in deeper worries about whether any reform can take place. If the pension bill had this problem, what would happen for the proposal for FDI in retail. The bigger fear is that the Government seems to be in reactive mode, not having done any planning for such policies. If the Government was serious, it would have reached out to Mamta, made her see the error of her ways, and then got her support for the Bill, even if it was going to take longer.




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