Saturday, February 12, 2011

Manmohan Singh finally takes charge

In a column for Yahoo India, I wrote in October last year that the empowerment of Jairam Ramesh’ Environment Ministry was a proxy play for the empowerment of 10 Janpath*. Since then, one headline project, by Korean steel behemoth POSCO, has been cleared by Jairam’s MOEF. This should hardly surprise one: the Central Government badly needs economic growth  foreign direct investment (FDI) to fuel our growing import needs. And, if Jairam’s red flag has directed the traffic of large projects to the address in Delhi where the buck stops, there is no reason why the clearances should be long coming.

What is a lot more surprising is that, ten days ago, Prime Minister Manmohan Singh should warn against the danger of environmental laws becoming like the licence permit raj**.

In other words, what Manmohan Singh seemed to be saying in early February was that he didn’t like the new game his own minister was getting up to. I find this fascinating: why did he need to make a public statement about this? As the head of the council of ministers, couldn’t – in fact, shouldn’t – it have been enough for him to tell his junior colleague off? That it wasn’t suggests to me that the PM was using the media to address someone whom he can’t direct. This could be Jairam, or the person Jairam takes his orders from. In my reckoning, this could only be Sonia Gandhi.

The Prime Minister has become increasingly visible, and audible, in the aftermath of the corruption scandals that have grabbed Indian headlines since September 2010. ‘Der aaye, durrust aaye’, better late than never: his acknowledgment of corruption in high places is a signal development. But distancing himself from the new decision-making paradigms of his own government is an even more arresting development. To me, it seems like a warning shot across the bows of the Congress ship of state.

This may be wishful thinking on my part, but it seems to me that our Prime Minister has realized his political career is coming to an end. It is extremely unlikely that he has more than 3 years of power left. If the current political turmoil deepens, it may even be less, as a successful vote of no-confidence after the 2011 elections could send the nation into mid-term elections. If he is to hang up his boots with any sense of achievement, visibly combating corruption could be his chance to go down in history. Even if he doesn’t achieve significant progress, “He died trying” would be a better epitaph than, “An honest man who led a corrupt government”.

If my speculations are correct, then Manmohan Singh  has sent word out that the fight is joined. 10 Janpath has been warned. There is little Sonia can do but back him. She has no power to restrain him; the worst she can do is sack him. Since he has no political dynasty to perpetuate, and no skeletons in his cupboard, she has no hold over him. However, his departure at this time would threaten the stability of her government. And, if he is as determined to combat corruption as he seems, he could make an unwelcome departure extremely embarrassing for senior leaders in the UPA.

The departure from the cabinet of Murli Deora, known to be close to the richest Indian, Mukesh Ambani, was the first sign that the Prime Minister is going to distance his government from powerful industrialists. Now, we hear that SEBI (Securities and Exchange Board of India) is going to fine the Ambani flagship, Reliance Industries, for insider trading. This is a grave charge, especially against a man who seemed so far to have inherited his father’s ability to make every government of the day bend to his will.

From the perspective of my musings, the action against RIL is extremely significant, especially against the backdrop of the firing of Raja. In relatively quick succession, Manmohan Singh has  slapped down a critical ally of the UPA government, warned off the woman seen as his boss, and let the regulatory hounds loose on the richest and most influential industrialist in the country.

His intent is clear. Expect the headlines to be roiled by highly visible action against corruption. 2011 will be the year of an honest man cleaning out his corrupt government.

*The emergence, in recent times, of powerful Chief Ministers owing little or no allegiance to the Center, had allowed promoters of large industrial projects to obtain political clearance at the state level, with little or no reference to the Center. The threat of more stringent perusal of the environmental laws by the Ministry of Environment and Forests (MOEF) at the Center would bring these promoters to Delhi.

**In the language of those familiar with Indian political economy, this refers to the absolute control over fresh industrial activity exercised by Indian politicians and bureaucrats prior to the liberalization of 1991. Licences, or permissions to industrials to set up new projects, or expand existing ones, were – it is widely accepted – granted in exchange for large sums of money or other considerations paid to the gatekeepers of the Indian economy.

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