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HE MAY HAVE talked up the market, particularly the PSU stocks, a couple of times. But reforms will not happen by talk, and much less by compromise. As the Prime Minister, Mr Atal Bihari Vajpayee, returns from a week-long foreign tour, many harsh decisions concerning the economy await him. In fact, he had committed himself on this count before he embarked on the tour. He made it clear that there was no going back on reforms, including disinvestment, and how achieving the goals entailed many difficult decisions. This show of commitment and firmness was obviously to balance the earlier wavering and loosening of the grip that nearly floored the NDA Government's reforms agenda. In the thick of the disinvestment controversy, the Prime Minister had indeed appeared to lose control of the situation, and most observers noticed a certain degree of defiance of his authority. It is just as well that he came into his own subsequently, stoutly defending the government's policy and pushing the critics on the back-foot. The next few days will tell if he meant business, particularly on issues of fiscal prudence and disinvestment.

The upcoming meeting with Chief Ministers surely provides him an opportunity to draw a roadmap for sound fiscal management. But will the Prime Minister have his way that easily? Some of the proposals doing the rounds, such as DA freeze, readjustment in pension payouts and reduction in retirement age, are highly sensitive and hence may not even get cursory attention at the meeting. No less sensitive and controversial are agriculture tax and subsidy cuts. Mr Vajpayee will first have to bring round some of his own party members to his point of view, as they are not inclined to support any "people-unfriendly" measures. May be sensing the mood, official circles already played down the proposals that were aimed at cutting government expenditure. Here is a situation where everyone in power talks of fiscal responsibility, but none is worried about the fate of the Fiscal Responsibility Bill.

As for the disinvestment proposals coming up for consideration soon, how the country's hard-pressed chief executive is going to stand up to pressure from the coalition partners and the main Opposition parties is a big question. Despite his avowed support for privatisation, doubts linger. That is because he has not yet won over all the dissenting groups. Secondly, competitive politics knows no boundaries in this country. This is one attribute the States have much in common. Nalco should not be disinvested, protests Orissa in almost one voice. But the State Government sets in motion the process for sale of its own units. Profit-making PSUs should not be privatised, thunders the Congress(I) spokesperson at every opportunity. But Punjab Tractors is being put on the block. Severely buffeted by all parties, including his own, how far the Prime Minister will go — be allowed to go, rather — is a matter for conjecture. Tough decisions do not come easily. Political costs have to be reckoned with. In such a scenario, can the Prime Minister crack the whip and keep his word? Can he walk the talk?

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