A Dangerous Precedent

A day after the lion from Bihar withdrew Congress support to the Deve Gowda government and plunged the country into sudden political uncertainty, Union Commerce Minister B.B. Ramaiah went ahead and announced a five-year export-import policy. The next day, the Foreign Investment Promotion Board cleared around Rs 1,000 crore of foreign investment proposals. A few days later, the Finance Ministry announced dramatic changes in the norms for external commercial borrowings--foreign currency loans--for the corporate sector. If that was not enough, four days after the Deve Gowda government fell, on April 15, the Reserve Bank governor unveiled a radical monetary policy that demolished the traditional control mechanisms that Indian governments have been using for the last 30 years to keep banks under their thumb.

But no political party complained very loudly about whether it was proper for a government, first under a very real threat of collapsing, and which then--no last-minute surprises--went ahead and did so, to keep taking significant policy decisions. No one wrote angry letters to the President; no one aired the fully watertight argument that a government facing a no-confidence motion and then a caretaker one should just engage its energies in keeping things running and nothing more.

So, all together now, should we thank the lord for this silence, which appears to imply that economic policy is at last freed from politics? No. At the risk of being seen as reactionary forces, my answer is: No.

The fact remains that it is constitutionally improper when a government which has lost the right to govern continues to decide the nation's future. And when politicians--cheered on by the upper middle class English press--try to find ways of getting a fallen government's budget passed, they set a dangerous precedent.

But, I can already hear readers complaining, Mr Kesri didn't have a problem with the budget or Murasoli Maran's investment approvals, he just wanted Gowda's head. Maybe. But any vote of confidence, as defined by our Constitution, is not against the prime minister but against the council of ministers; when Kesri handed over his letter to the President, he was, whether he liked it or not, expressing his opposition to P. Chidambaram as finance minister, to Indrajit Gupta as home minister, to Jai Narain Prasad Nishad as environment minister, and all the rest of them. The one-line confidence motion always reads: "The House has confidence in the Council of Ministers.

Nit-picking, you say? Let me make it clear that I agree with the policies announced and decisions taken since March 30. But if I agree with the contention that this caretaker government has done the right thing by taking these decisions, then I should logically also have no problems with ministers in the Chandra Shekhar government freely allotting telephones and gas connections after the government resigned and was made caretaker. Mr Chidambaram's budget exhilarated me, but those desperate attempts to get the budget passed before the vote of confidence, and to delink it from the government's stability, were dangerous for the nation. Suppose that attempt had succeeded, the budget was somehow passed before the Gowda government fell, and the country went for a mid-term poll. A new government comes in by June, and proposes a radically different budget, which it has every right to do. Imagine the confusion in the international investor community. Indeed, the truly constitutionally proper way to handle Finance Bill 1997 is this: after the new United Front government takes oath, even if Mr Chidambaram is again the finance minister, he should rise before the House again and present his budget afresh. If he wishes to present the same budget, the Speaker can absolve him from making the same 88-minute speech again, and move straight onto:. the debate. Indeed, Mr Chidambaram should possibly take a re-look at his budget proposals to see if he wants to make any changes. Only the most incurable optimist would still believe, after March 30, with a clearly unstable government held hostage by the Congress, that the nation has a hope in hell of raising the targeted Rs 10,000 crore in taxes from the unitary disclosure scheme. It's a new government, it's technically a' new budget: he has the right to tinker.

Political parties have not complained too vociferously about all this gross impropriety that has been going on--though the BJP and the Left have made noises--because they may be resigned to the fact that there is only one broad direction in which Indian economic policy has to move. There are no alternatives. India has to continue to liberalise trade norms because powers greater than us have ganged up and hung the Damocles' sword of WTO over our heads. Taxes have to keep going down because we need foreign companies to come in and set up shop and provide employment. Public sector monopolies, especially in the infrastructure sector, have to be demolished, because the public sector and the government by themselves will be able to generate only a minute fraction of the Rs 15,00,000 crore we need over the next 10 years to get infrastructure in shape. And so on.

Aha, you say, so economics is at last free from politics, as free as it can get. And isn't that a good thing? The reactionary-running-dog school of thought begs to differ. Economic policy should be free of petty politicking, yes. If possible, politicians should be banned by law from bankrupting public sector banks by forcing them to dole out loans to unworthy party cadre, and making electricity free for rich farmers. But if economic policy were freed from political ideology, the whole concept of polity--and even social structure--as we understand them today, would collapse. If the various constructs that hold society together are conceived of as mutually exclusive, not supporting, arguing, cohabiting with one another, that's...well, not any sort of society that civilised mankind has been familiar with.

But I can't win this argument with you, my upper middle class reforms-fuelled Outlook reader who wants to start paying 30 per cent income tax instead of 40, or have already transferred your car to your wife's name so you don't fulfil the minimum two parameters out of four in the new asset-based income tax system proposed. Because I'm now hearing that last argument of yours. "Economic policy separated from political ideology?" you say. "Political ideology?" To that I have no answer.