The Economic Times on 28th August 2013 ran a editorial where it asked a question on why we are where we are. This is my response to that editorial as invited by ET. Part 2 is my further thoughts on the issue and will follow.
Mistakes occur either due to
insufficient information, risk taking, bad judgement or due to extraneous reasons beyond our control. Except
in the last case every government has the option of making midcourse
corrections. This is exactly where this
government has failed miserably due to
arrogance and blind ego apart from lacking in statesmanship. Let us list some correctable goof ups.
UPA was a coalition govt and
it was crucial to have a single driver lead it no matter who the driver
reported to. Instead by having a dual
power centre between Sonia and Manmohan disaster was guaranteed from day 1.
Manmohan was a brilliant economist & bureaucrat but a cipher as a
politician. A lamb living amidst lions for decades does not become a lion. Consequently
the Congressmen chose to listen to Sonia while the coalition partners went to Pawar,
Karunanidhi, Mamta. The result was that there was zero cohesion in decision
making, policy framing or even problem solving. The PMO was just a waste bin
where the problems landed up finally with no solution possible. For this or
whatever reason Manmohan Singh went quiet and stays silent till today. A large number of scams and issues have their genesis in this lack of control &
direction and once the chains had been removed it has been impossible to bring
them back on.
Technology, Global events
& Human behaviour can never be
predicted and so events happen that need changes in laws, justice & administration
systems & future strategies. These
changes invariably happen AFTER the event. The changes based on learning’s are a ongoing exercise and there is no shame in this change. Global mergers/acquisitions, Ecommerce, Social
media, Arab spring, Sri Lankan war and
many such events posed challenges to our existing systems. Instead of
responding maturely this govt chose to confront them as if they were a
blasphemy. Case in point the Vodafone case where the event was perfectly legal
and even the SC ruled against the Govt. Instead
of finding a out of the box, mediated solution with Vodafone & bringing in fresh
legislation the govt instead brought in retrospective change from 1960. This one
action did more to damage India’s credibility as a nation more than anything else.
Foreign policy historically has
always been sacred and the domain of the central govt which was expected to be
above narrow considerations. Instead we
had the mortification of a PM being prevented from signing an accord with Bangladesh (which had helped
combat terrorism against India), opposing Sri Lanka internationally and in each
case a regional party with a few MP’s
decided foreign policy. Consequently the image of India as a banana republic
with no driver or leader got reinforced globally and investors became wary of India.
While many in public will make the right noises this writer on his visits globally has found that
the reputation of India has nosedived notwithstanding its huge market.
Administrative practices haven’t
changed over the years inspite of the economy having changed beyond
imagination. The centres of power for decision making remain as it were way
back in the 90’s. Consequently a Jt Secy
who handled million dollar decisions now handles billion dollar decisions and
the million dollar decisions don’t get focussed attention. It’s natural for any
human/ system to chase the big fish but
in the process the dozens of small fish get neglected and this bad news spreads and affects investment.
The NDA govt had introduced market based pricing for fuel, done the dirty work and lost the election. This govt changed that policy and the
consequent impact due to steeply increasing fuel prices affected the country
badly. This govt is now going back to
the old sensible decision of 2004 but 10 years late and after severe haemorrhaging.
Every decision taken has been
with good intention, bad planning and poor execution. Consequently whether it
is FDI in retail, Insurance reforms or any other policy including the FSB, decisions have been forced as a fait accompli
inspite of their good intent by failing to engage maturely with the stakeholders in discussion. The internal
lack of leadership & direction has been blamed on the opposition who as is
their nature see no reason to bail a govt that is tying itself in knots.
Each of these and many others were easily correctable problems
but for reasons best known to govt they never made an effort to even accept
them as problems. Therein lies the rub in our disaster today.
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