Addressing the industry association ASSOCHAM’s 92nd annual meeting, Prime Minister Manmohan Singh has finally broken his silence on economic woes, though after a long spell, but his propositions hardly seem to fix the problems that are abuzz owing to the slackness of the UPA government. Despite depreciation of the Indian currency against US dollar as well as the economy getting besieged with myriads of problems, the PM remained non-committal. It is quite surprising that Manmohan Singh, in a bid to fend off political criticisms from all quarters, cited the achievements of his first tenure and tried to prove that the pace of economic growth during the UPA has been far better than that of the NDA dispensation. This is totally wrong as the contour of alliance as well as economic scenario of UPA-I was different from the incumbent government. The slipshodness of the ruling establishment at the Centre is sole responsible for the economic mess.

Whatever claims the Prime Minister makes, the bitter truth is that the UPA government has scripted failure in its second tenure. Since the beginning of UPA-II, the ruling establishment at the Centre has been keen on focusing on the social sector. Politically, the government’s such commitment has some justified reasons as several schemes being carried out in the name of bringing backward and downtrodden people to the mainstream of society have become a tool to grab the vote bank, but nobody has bothered to ponder over the repercussions of decline in the industrial and agricultural products. The huge funds being spent on the schemes to woo voters not only deepened the budget deficit but also eclipsed the economic growth. The policy makers of the UPA government are reluctant to accept the fact that boosting industrial base and infrastructure generates employment and increases the pace of development. This government neither invested in infrastructure nor fixed the problems of industries. The poor state of power sector, which is deemed to be the backbone of industries, clearly indicates that how the government has ignored the basic requirements for industrial growth.

The seed of present economic crisis was already sown during the tenure of UPA-I. The MNREGA scheme, a flagship programme of UPA-I for generating employments in rural areas, enormously dented government exchequer as it could not be effective in contribution to the infrastructural development. However, rural population got employment opportunities under MNREGA scheme, but it could not improve the plight of infrastructure. The MNREGA adversely affected the job opportunities in urban areas. Rural people stopped migrating to cities for jobs, hampering the industrial production. Had the MNREGA funds been spent on the development of infrastructure, both the rural and urban people would have got more job opportunities and there could have been proper economic growth. On contrary, the  government preferred to bring the policy of direct cash transfer into practice for its political gain. However, the government is shying away from owning responsibilities of pitfalls of the policy.

The PM’s address to the ASSOCHAM makes it clear that the UPA government is not ready to understand the gravity of economic crisis. There is no merit in his advice that industrialists should drop negative thinking and move ahead. It seems that the Prime Minister himself has not taken the criticism regarding economic crisis in right perspective. He is familiar with the fact that mere one percent decline in the growth rate will affect millions of jobs. Manmohan Singh must aware of the fact that depreciating rupee has not only increased the import costs but also created problems on export front. The poor infrastructure coupled with lack of labour reforms has mounted the problems industrial sector. Surprisingly, this government paid only lip-service on labour reforms which badly affected the industrial sector that can be gauged from the battered financial condition of cotton industries. There was a time that India was one of the largest cotton exporters in the world but now other Asian countries including Bangladesh have become the major players in this sector. Despite higher demands, agricultural production remains static, thanks to the slackness in agrarian reform. Unfortunately, at a time when demands for food items are increasing, the people are finding it difficult to make their both ends meet. The PM is aware of it but he does not decide agenda for his own government. Instead, Congress president Sonia Gandhi-led National Advisory Committee (NAC) sets all the government agenda. The NAC was instrumental in implementing several social schemes without bothering about their adverse impacts on the economy. Many schemes and projects related to infrastructure and mining halted owing to the intervention of NAC’s environmentalist members, which battered the economic growth.   

The dual power center of the UPA is the reason behind current economic scenario in the country. However, the PM denied it and took responsibility for the mess, but it is palpable that Manmohan Singh is not exercising his duty freely. Given the current scenario of Congress, it’s possible that dual power center formula will be repeated in the days to come as it’s not clear whether Congress vice-president Rahul Gandhi is willing to run the government. Every political party needs to take a lesson that if man at the helm is divested from taking decision and he has to work under pressure and direction, the entire system will certainly collapse. This fact is equally applicable to the Prime Minister as well as chief ministers of the states.   

(An original copy of the article published in Hindi on July 21, 2013 translated by the English editorial. The author is the Group Editor of Dainik Jagran)