Addressing the nation after taking some controversial decisions last week, including the one to allow Foreign Direct Investment (FDI) in multibrand retail, the Prime Minister Mr.Manmohan Singh has sought to defend that decision on the ground that it will lead to a "better life" for farmers, youth and consumers. Side by side, he has sought to defuse the political fallout by declaring that every state has the right to take its own decision in regard to FDI in retail, meaning that this is only a policy prescription by the centre.

Obviously, Mr.Singh is anxious to placate the opponents of FDI in multibrand retail, be they political parties or state governments. But, in his anxiety to contain the fallout, the Prime Minister may have propounded a dangerous thesis that could alter the constitutional balance between the Centre and the states.

His claim that the entry of FDI in multibrand retail will lead to a "better life" is being seriously contested by economists and political thinkers and even by those who swear by market economics. Hopefully, Indian consumers will not be taken in by all this government-sponsored hoopla and will respond responsibly to the arrival of these new mega stores. While the market will give its verdict on whether we will be better or worse with the arrival Walmart and the like, the FDI in multibrand retail decision could bring in a bigger problem.

If we examine the splintering of the polity over the last 15 years, the growth of regional and sub-regional parties and the steady erosion of the powers of the Union Government, it is evident that the unitary tilt that is there in the Constitution is coming in for some de facto corrections. Slowly, but surely the Centre is yielding to the states. "We recognise that some political parties are opposed to this step.  That is why state governments have been allowed to decide whether foreign investment in retail can come into their state" is how the Prime Minister explained the Centre's approach to the problem.

Obviously, in his anxiety to save his government and the major policy which he announced, Mr.Singh may have willy nilly weakened the Centre. The Prime Minister's argument that his role is merely to propound policy could come to haunt the Union Government in the future, irrespective of who is running it. States could cite this formula and claim the right to accept or reject national policies, thereby making India much more ungovernable than it is today.

The Constitution delineates the powers of the Centre and the states and the fields assigned to each of them is clearly demarcated in the first and second lists in the Seventh Schedule. There is also a third list of items on which both the Centre and states can legislate, with the rider that when the laws overlap, the law made by parliament shall prevail over that made by the state legislature. If allowing entry of multibrand retail companies like Walmart is within the power of the Union Government, one would presume that the power to execute the decision would also lie with it. Let us not forget the agitations like the one near the Kudankulam Nuclear Plant and its implications for governance in the country.

In his address, the prime minister referred to the situation in 1991 on at least two occasions. Defending the government's decision to raise the price of diesel he said if this was not done, it would have meant a higher fiscal deficit, steep rise in prices, loss of confidence in the economy etc. At that time nobody was willing to lend India money. This was the problem in 1991. "We came out of that crisis by taking strong, resolute steps. You can see the positive results of those steps".

Mr.Singh said he knew what happened in 1991 and therefore, he would be failing in his duty as Prime Minister if he did not take strong, preventive action. We need to note two points here while discussing 1991. The first of these is that we had P.V.Narasimha Rao, a seasoned politician who had a clear vision for India as the Prime Minister. Rao invited Mr.Manmohan Singh to join his Cabinet as Finance Minister and from day one guided the economic policies of the government. Insiders say that the dramatic economic reforms package in Mr.Singh's first Budget in 1991, which meant a radical break from the past, was Rao's idea. Rao had inducted Mr.Singh with the specific idea of bringing in radical change but Mr.Singh, by training, was ill-equipped to formulate a path-breaking and trend-setting economic policy which India desperately needed. Having been a file pusher and climber of the bureaucratic ladder in a sham socialism environment during the days when Indira Gandhi and Rajiv Gandhi were at the helm, he just did not have the courage to break away from the Nehruvian policy framework. It was Narasimha Rao who gave him the intellectual and political strength to effect the change. Again, it was Narasimha Rao who insulated Mr.Singh from the constant onslaught from the communists and socialists both within parliament and outside. Once he felt secure that Mr.Rao's Vajra Kavach shielded him, Mr.Singh applied his economics skills to the political agenda laid down by his boss and began slowly but surely dismantling the bogus socialist policies pursued by the Nehru-Gandhis for 45 years since independence, which had impoverished the people and turned India into a beggar state.

Such was Rao's determination to effect fundamental changes in economic policies that he protected Mr.Singh and retained him as Finance Minister for the entire five year term of his government, despite stiff opposition from both within the party and outside. It was therefore the courage and vision of Rao that eventually helped India get out of the economic rut that it was in at that time.

Given the tough decisions that Rao took, Mr.Singh comes through as a leader who lacks the courage and the political strength to take decisions and to lead from the front.

The second reason why Mr.Singh should not compare 2012 to 1991 is that in the latter case, Rao inherited an economy that was in doldrums. We did not have the foreign exchange needed for two weeks of oil import. Mr.Singh had no such problem when he became prime minister in 2004. Further, by his own admission, Mr.Singh says the nation has registered a creditable GDP growth average of 8.2 per cent over the last five years. Therefore, if things have suddenly gone wrong, he has no one to blame but himself. Since he lacked the courage of Narasimha Rao, he has allowed the economy to drift. His singular achievement in recent years is that he has clung to his chair and become the third longest serving prime minister of India. While he will undoubtedly find a place in the record book, where does that leave India?