Monday, June 20, 2011

Power & Politics / The Sunday Standard Magazine/ June 19, 2011



The United Progressive Alliance (UPA) seems fated to slip into fatal political darkness. For the past seven years, communal harmony and sustained economic growth were the pride of the UPA. It was also credited with having some of India’s best administrators as Cabinet ministers. They delivered on promises and also solved many predicaments of the Government. One of them is Finance Minister Pranab Mukherjee—the short man with the tallest stature in the UPA—who is finding himself in the middle of everything and every mess. The joke doing the rounds in the corridors of power is that the UPA without Pranab is like a powerhouse without energy. Take him out of the equation and the coalition will collapse like ninepins. Excessive deployment of its most productive asset has started to affect Pranab’s capacity and capabilities to deal with crises. Pranab is the fire hydrant used to douse sparks from the DMK. Pranab is the main Congress draftsman on party policy. Pranab is the right man to talk to the Americans during the upcoming strategic steps meet in July.

Drafted to douse raging fires everywhere, his own courtyard is engulfed in a fierce conflagration. For the first time in years, the economy is floundering, with high inflati
on and policy slowdown dragging it down. Pranab spent over three months keeping feisty ally Mamata Banerjee in good humour and fighting the West Bengal elections. The ace minister, who usually spends over 12 hours a day in his North Block office dealing with fiscal policy, was asked to forget good economics in favour of bad politics. As chairman of the Cabinet Committee of Parliamentary Affairs, he was burdened with the onerous task of keeping the entire opposition on the Government’s right side to enable legislative business to function smoothly. Once the Congress chose confrontation instead of dialogue, it was Pranab’s thankless job to play Field Marshal. He is the chairman of over 50 Groups of Ministers; never before has a Union minister been chosen by a prime minister to head so many GoMs. Now the law of diminishing returns is catching up. Average inflation has risen to over 9 per cent and food inflation to 13 per cent. Lacking a magic wand, banks have raised lending rates for homes and education to around 11 per cent to contain inflation; two years ago, it was it was less than 8 per cent.

The finance minister is harried to find extra funds to finance the populist schemes floated by the Sonia Gandhi-led National Advisory Council, which is insisting on a Food Security Bill with a higher populist quotient. To add to Pranabda’s woes, the Rahul Brigade is demanding the inclusion of more districts and money to be paid to the jobless under the Mahatma Gandhi National Rural Employment Guarantee Scheme. Another quandary the finance minister faces is keeping petroleum product prices under control. The Government has raised diesel and petrol prices 11 times in the past one year; oil producing companies are seeking yet another raise, citing rising global crude oil prices. His next worry is his old friend and Agriculture Minister Sharad Pawar asking for extra money to raise the minimum support prices for agricultural products. As the Uttar Pradesh poll countdown begins, the Rahul Brigade will demand special packages for various backward regions in the state as the Congress plank to take on the mighty Mayawati.

Pranabda’s worst dilemma is convincing the naivĂ© opinion-making classes that bringing back black money is chasing a mirage. Since the finance minister has been too busy in political firefights, he lacks the time to discuss with advisers and present a viable course of action on the issue. Instead he announced panel after panel, committee after committee. At present over half a dozen groups have been asked to assess the scale of hush money abroad— ignoring data already available with the Government. Adding to Pranabda’s burdens are the Posco, Vedanta and Air India messes.

Another headache is persuading all political parties to agree on fixing a General Sales Tax Bill and new direct tax code. All child’s play for a seasoned leader like Pranabda— if only he isn’t dragged away from North Block periodically for disastrous missions like the Ramdev airport fiasco. Pranab can contain rising inflation if he is allowed to work uninterrupted rather than wasting time on arguing for and against Team Hazare on the Lokpal Bill and burning midnight oil formulating the Government’s response to aborted negotiations with civil society leaders. Since success has many fathers and failure has none, some of his colleagues are raising doubts about Pranab’s problem-solving skills. Digvijaya Singh, the Congress General Secretary with a difference, indirectly questioned the propriety of Pranabda’s airport visit, saying the finance minister had put his career on the line. Sooner or later, Pranab’s adversaries are bound to complain that the economy is in a mess because its Chief Financial Officer was messing around with minding all other businesses except his own.

The time has come for Dada to return to what he does best—managing the economy.

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