The propensity to be blackmailed into not doing what is right has been the hallmark of the UPA II regime.

Not having the numbers is possibly the worst excuse for underperformance that the Congress-led United Progressive Alliance (UPA) can give, as it completes three years of its current term at the Centre. The Congress got 206 seats in the 2009 Lok Sabha polls. While short of the magic majority mark of 272, it was still the highest that a single party had won in any general elections from 1996. It will also probably be the highest any party can hope for in the foreseeable future in an increasingly fragmented and federal polity. 206 seats provided a sufficient equity capital base that could have been effectively leveraged to ensure a stable and robust political balance sheet. It also conferred enough flexibility, so as to not get bogged down by the tyranny of a minority drawn from smaller individual parties making up the ruling coalition. But what one has seen during these three years is a Government totally lacking initiative and afraid of doing anything posing the slightest political risk, even if existing only in theory.

Not having the stomach — rather than the numbers — to take major policy decisions has, in a sense, been the hallmark of the UPA regime in its second innings so far. Take foreign direct investment in multi-brand retail. This is something that could have been aggressively projected as pro-farmer, and its opponents as those aligned to entrenched mandi intermediaries that stand to lose if organised retailers were to source produce directly from the fields. Instead of setting the agenda on these terms, the Government meekly caved into pressure from not just the Opposition, but even its own alliance partners. The same propensity to be blackmailed into not doing what is right has also been seen in going back on decisions regarding raising rail passenger fares, signing a pact on sharing of Teesta river waters with Bangladesh, or implementing phased decontrol of urea and petro-product prices. This indecisiveness has, in turn, rubbed off on corporates, who have lost confidence to invest in an environment of uncertainty where nothing virtually moves and even the Prime Minister pleads helplessness.

The effects of all these are coming home to roost now, with the economy battling the effects of a serious slowdown and the rupee falling to fresh lows every day. Coming amid a worsening outlook for global capital flows and trade, it has all the ingredients of a crisis in the making. History shows that crises awaken even the most inactive governments into action. That is the only hope one can latch on to during the remaining two years that UPA-II has in office. The Samajwadi Party, with its 21 members coming closer to the ruling alliance, can perhaps provide just the right political opening in this connection. At the least, it could send a message to other allies that this is a Government which can exercise leverage, provided, of course, it actually wants to.

(This article was published on May 23, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.