LOSER AT BOTH ENDS - After the FDI farce, the UPA government has lost credibility Cutting Corners - Ashok Mitra

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LOSER AT BOTH ENDS - After the FDI farce, the UPA government has lost credibility

Cutting Corners - Ashok Mitra

A government can perhaps carry on even if it loses respect. It is a different matter when it loses credibility. India descends a further eight places in the international listing of least corrupt countries. A key member of the government's think tank is glib enough to butt in: no worry, all that needs to be done to weed out corruption is to drop bribe-giving from the roster of criminal offences. Another key individual in government is in an equally playful mood: increase the price of petroleum products; inflation, he suggests, will immediately come down. Per capita calorie intake of the two bottom deciles of the population has, according to official data, declined over the past quinquennium; the same very important person jumps to the conclusion: India's poor are getting prosperous, so much so that they are moving away from consuming rubbish foodgrains and raising their intake of fish, meat, poultry and milk. The more plausible explanation that soaring foodgrain prices are forcing the poor to buy — and consume — less grain, does not occur to him. Consider, too, the spectacle of topmost policymakers in government quibbling in public over whether growth in gross domestic product this year will be 6.8 or 7.2 or 6.9 or 7.1 per cent, as if the very existence of the nation is at stake on the precision of the forecast. There is no end to such frivolities. The finance minister makes a great ceremony of the fact that, as he had predicted, the rate of inflation has come down in December; everybody, however, knows that the kharif crop begins to arrive in the market during this month, cooling down prices. Move to a different plane. The prime minister rushes half-a-dozen of his ministerial colleagues to the airport to accord an obsequious reception to a sly, money-loving, religious preacher. Not two days pass: a midnight police raid is organized to rough him up. The quixotic Gandhi is alternatively deified, sought counsel from, disagreed with, vilified, arrested, once more mollified, again differed with, conceivably at the next phase will be taken for a ride. It is an administration which, all evidence indicates, does not know its mind, asserts something today to repudiate it with robust zest before day breaks tomorrow. The prime minister's assurance that foreign direct investment in retail business will, in the ultimate round, benefit both farmers and consumers as well as be employment-creating, therefore, does not impress the ordinary householder. He does not sound credible. It is difficult to believe him for another reason too: he is not his own master. For instance, he was, documents now published prove, aware of the shady goings-on over the allotments of the 2G spectrum; but he was incapable of intervening. The credibility of the prime minister is not by any stretch enhanced when one of his cabinet colleagues openly opposes the cabinet decision on FDI in retail trade and an even more important cabinet colleague publicly warns the government of the perils of going against public sentiment. The situation is made even more awkward by a state government presided over by his own party declaring its resolve to keep out foreign interests from retail trade in its territory: one or two members of parliament belonging to the party are no less rebelliously vocal on the issue. With such wobbly support within his own fold, the prime minister is not such a fool as not to guess why he is not believable to others as well. Yet, for at least the best part of a week, there is every indication the prime minister this time will brook no opposition and is determined to fulfil his heart's desire. Suddenly, it is reverse gear: the matter is indefinitely on hold. The manner the decision to back down reaches the public betrays a nervousness that hardly adds to the dignity of the regime. The West Bengal chief minister owns 19 votes in Lok Sabha; she perhaps asks for Rs 19,000 crore at one go as price for casting these votes in favour of FDI in retail trade. The prime minister needs these votes, but discretion prevails over temptation, and for two reasons. The doughty mademoiselle is likely to keep demanding repeats of the packet every occasion from now on that the government faces a crisis of existence. Moreover, other chief ministers will not take it lying down if West Bengal is granted a freebie of whopping magnitude while they are left sucking their thumbs. Implications, particularly for the impending poll in Uttar Pradesh, have to be thought of. No deal, therefore, with the West Bengal chief minister, who threatens to walk out of the United Progressive Alliance without further ado. Follows the frantic appeal to her not to do any such thing, the FDI decision, she is promised, will be reviewed. Not any Central minister, a state chief minister is the first to inform the world that the Union government has chosen to unsettle a settled decision. The farce is for the present ended. It is still worth probing what lies behind the prime minister's sudden extra exertions crammed into those few days to ensure Walmart's entry into the country. Is not the underlying factor his firm belief that a gesture is desperately called for at this moment to convince the United States of America that India is waiting in the wings to serve the interests of God's Own Country? The mess the Americans have created for themselves in Pakistan can have unpredictable consequences. It may even radically transform the global geo-political picture. The current regime in our neighbouring country has, for dear life, been outspoken against the US; a furious nation would otherwise have turned it out. A few tacit and not so tacit messages must have also been exchanged with Beijing, emboldening the strategy-makers in Islamabad. Pakistan's minister for external affairs has started warning the US administration in the stern terms that were, some 50 years ago or thereabouts, the intellectual property right of India. The circumstances, the prime minister in New Delhi has possibly assessed, are tailor-made for him and his country. If India is smart enough — and resolute enough — to carry out the US will in different spheres, windows of opportunity will be wide open. The coming decade is bound to see a developing confrontation between a steadily diminishing US and a growingly aggressive China pulsating with economic and military prowess. Once ensnared by imperial grandeur, it is awfully difficult to get out of it. China's challenge will, therefore, not be left unresponded to by the Americans. An economically enfeebled US has to have allies who are both dependable and capable of contributing substantially to the Western cause. Pakistan, riven by internal chasms, has exhausted the possibility of filling that role. India will be a vastly superior bargain. It has an emerging middle class sold on the American dream of scaling the furthest heights of economic affluence; it has a stockpile of sophisticated technological skills alongside a widely diversified industrial base; it is keen to add to its resources of nuclear technology with a helping hand from the West, it has a promising infrastructure of Sinophobia. Its weak point is an administration awash with corruption and ideological heterogeneities which often render it incompetent in carrying out commitments. Our prime minister wishes to erase the black spot on the country's reputation. The US administration has to be persuaded to believe that India from now on means business. There is no better way to do so than allowing American investors unrestricted entry into the luscious terrain of retail trade. Once our credentials are firmly established with the Americans, why, even the sky will cease to be the limit for India: increasingly closer interaction in different economic activities with American capitalism will pave the way for even more dazzling prosperity for India's topmost strata. The only prerequisite is satisfying the US of India's credibility; FDI in retail trade presents a lovely opportunity to pass that test. That is what it is all about. Even if by weakening credibility within the country it is possible to win credibility in Washington, D.C. — the government has to go for it: the prime minister might have implored to his party. At one point, the supreme decision making authority in the party okays his prayer and he goes ahead with the cabinet seal of approval on the FDI proposal, never mind the cacophony of domestic protest and the risk factor related to the UP election. All is not though well that does not ends well. The domestic compulsions, it has been reckoned at the last moment, are much too much. This government is now bereft of credibility both at home and among capitalists let down overseas.