Slowly but surely, the Congress is taking a sharp Left turn on economic policy. 'Garibi Hatao' is the battle cry the Congress hopes will bring it back into the reckoning and though right-wing economists at the Rajiv Gandhi Foundation (RFG) are not happy, party MPs who have to function within the realms of realpolitik find that the new line is something they can sell to their votebank.
From the start of the budget session of Parliament, the Congress stand on disinvestment, WTO and subsidies was at complete variance with the policies enunciated during P.V. Narasimha Rao's liberalisation era-and more recently, in the Congress manifesto for the 1999 election and party president Sonia Gandhi's own pronouncements.
Sonia seems to have changed. And the change's through the pressure brought on her by her MPs. The Antony report first sounded the Left turn and soon many MPs joined the chorus.
It was Sonia who articulated the return to populism in her speech at Delhi's Ram Lila grounds on March 6: "The prices of items available through the public distribution system have increased... Worse, some 1,500 items can now be freely imported. Items like rice, potatoes, milk, clothes, shoes, jowar, bajra, rapeseed and dals are on the list. A frightening picture!"
Sonia went on to say that implementing the WTO agreement would end in large-scale unemployment and that "India will become a market for other countries. Can there be a greater economic slavery than that? This is being done by people who say they are nationalists and raise swadeshi slogans". The ploy is very clear. Since the Vajpayee government was the one to sign on the dotted line, it could be accused of having sold the nation.
Reconciling Sonia's stand with the party manifesto is tricky. So Lok Sabha chief whip Priyaranjan Das Munshi says that the party doesn't oppose WTO as such but has reservations on the manner it has been implemented-specifically, putting food items on the liberalised imports list and signing the agreement two years before time. Agrees Rajya Sabha MP Vayalar Ravi: "The Congress has taken an honest position on WTO. We'll have to meet our commitments but we will insist on bargaining as much as possible."
The Congress unequivocally opposed cuts in food and fertiliser subsidies, saying they were the only social security the country had. But the manifesto had said: "A high-level Expenditure Management Commission will be set up to build a national consensus on...implicit and explicit subsidies that are now at an unsustainable level of 14 to 15 per cent of the GDP."
Says a pro-liberalisation Congressman: "What we are now saying is we don't care where the finance minister gets money from-we'll criticise the fiscal deficit and at the same time refuse any cuts on subsidies. No one is looking at numbers any more." But looking at the balance-sheets does not bring in votes. So the Congress as a party has decided to do a 'U' turn.
Similarly, on disinvestment, the position in the manifesto on the "strategic reorientation of the public sector" and speedy implementation of the disinvestment commission's recommendations has been lost in the din against the proposed privatisation of steel plants. But even this is a rollback on the Congress' professed commitment to liberalisation. As Tamil Nadu chief minister M. Karunanidhi pointed out, it was the Congress that first ushered in the concept of privatisation of PSUS.
Justifying its current opposition, Ravi says, "For disinvestment, read acquisition by the private sector. With no strong consumer laws, the government will lose its leverage in the economy and consumer markets." Says CWC member Pranab Mukherjee (a votary of Manmohanomics): "We are opposing privatisation as we want to know where the proceeds will go."
The political benefits of the late return to Nehruvian socialism have been considerable; the party has been able to make common cause with the Left and the Samajwadi Party and even NDA allies including the TDP, DMK and Trinamul Congress. Last week, it joined these parties in protesting against cuts in subsidies and the privatisation of the Salem, Visakhapatnam and Durgapur steel plants.
The first hint of change came in the Antony committee report which went into the party's debacle in the 1999 general elections. It said: "The committee is convinced that the Congress must remain a left-of-centre party.... There must be a distinct demarcation in the Congress party's left-wing approach to economic reforms and the BJP's approach to economic reforms."
The next came when Rao himself, first in a speech to assocham and then in an article in a leading daily, called for a review of economic liberalisation and himself questioned its benefits. Sonia's Ram Lila speech was pretty much in line with the reinvented Rao. It has been realised by Congress leaders that their political space today is the one demarcated by Indira Gandhi. Should they pursue the economic reforms agenda, they would only be sharing the BJP's platform.
Reacting to Sonia's address, a senior Rajya Sabha MP observed that it was drafted by Mani Shankar Aiyer "and not that American fellow, Jairam Ramesh"-a snide reference to Sonia's Ramesh-drafted speech at FICCI months ago, when she earned cheers from the business community for reiterating the party's commitment to supporting the BJP government on economic reforms.
Sonia appears to have learnt the hard way that a responsible opposition is not necessarily a viable one. Apparently, she received constant feedback from party workers on her tours that the Congress was no longer seen as the party of "garibi hatao", which had hurt its electoral prospects.
She was told by the socialist lobby in the Congress-A.K. Antony, Aiyer, Arjun Singh, Ravi and, to some extent, Rajesh Pilot and Jitendra Prasada-that the BJP was attacking the legacy of the Nehru and Indira Gandhi eras. Congress MPs point out that Sonia has now been forced to collect inputs from the party rather than from economic experts associated with the RFG.
"The Congress president has realised that under the circumstances, Indira Gandhi's concept of economic self-reliance and the cautious liberal approach of Rajiv Gandhi, in the light of Pandit Nehru's mixed economy, should not be given the go-by," says Das Munshi.
Partymen say Manmohan's marginalisation-there are rumours he may take up a UN assignment-flows from the return of Arjun Singh. The pro-poor economic policy and the Rajya Sabha nominations are both seen as an indication that Arjun Singh and Vincent George are in control of 10, Janpath. By seeing that no other member of the coterie-Natwar Singh, M.L. Fotedar and R.D. Pradhan-made it to Rajya Sabha and projecting himself as the architect of the successful campaign against the RSS and the entente with the RJD in Bihar, Arjun Singh has emerged as her chief advisor.
Of late, the party's right-wingers are silent; the left-wingers triumphant. Aiyer, who-significantly-was selected to speak on the budget after the mandatory opening by the deputy leader of the Opposition, went so far as to make a veiled attack on Manmohan Singh in the Congress Parliamentary Party meeting. The former finance minister has himself toned down his position and is understood to have agreed to a review of the party's economic policy in view of the demands from rank-and-file Congressmen.
Given the current atmosphere in the party, a senior MP observes: "If the Insurance Regulatory Bill had been introduced in this session, we would not have supported it." Some see a dichotomy between the Rajya Sabha, which is pro-right (a reference to Manmohan and Pranab Mukherjee) and the Lok Sabha, which is pro-left (Aiyer, Das Munshi, Pilot and Prasada).
A section in the party admits the party's left turn is prompted by political and not ideological concerns. The hue and cry over disinvestment and WTO-fortunately, there are no related Bills in this session-will not extend so far as to oppose any legislation. #
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