Development and democracy

Dr. Ashwani Mahajan
Although the issue of the dual centers of power in the Government and the Congress party, especially its chief Sonia Gandhi and not so strong Prime Minister, is not new. However revelations, earlier by the book authored by Prime minister’s former media adviser Sanjay Baru and later another book by former Secretary, Ministry of Coal P.C. Parekh these issues have once again warmed up in wake of elections. These revelations have not only brought out the broader issue of independence of decision making by the Prime Minister of this country.
According to the constitution of India, Parliament is the supreme decision making body and the Prime Minister is at the centre of the power. Not only the selection of Cabinet; in fact appointment of Governors and other constitutional positions, are all made on the basis of the recommendations of the cabinet under the chairmanship of the Prime Minister. Revelations that important files of the PMO were seen by Sonia Gandhi, in a book authored by past media advisor of the Prime Minister, Sanjay Baru, not only raise questions on the autonomy of the Prime Minister Office (PMO), but also the dignity of the Prime Minister.
Those who are aware of the functioning the government, know that PM had been working on the advice of Sonia Gandhi. However by mentioning the same in the book, Sanjay Baru has made it a point of public discussion. This is not the first time that such issues have been raised. At earlier occasions too, apart from the opposition parties, even international magzines have criticised the PM by raising similar issues. In June 2013 USA’s ‘The Economist’ magazine commented on the Prime Minister. Later in its July issue ‘Time’  magazine of USA termed Prime Minister as ‘underachiever’. US President also joined this chorus by criticizing the Manmohan government. ‘Time’ had alleged that Prime Minister lacks the will to bring the economy back on the track of economic growth. It said, faced with the challenge of slowdown in economic growth, huge fiscal deficit, and sinking rupee, congress led UPA government has demonstrated complete lack of direction. Further the magazine added that investors, both domestic and foreign are depressed. Self-confidence of the Prime Minister has been dwindling in the last three years of UPA-II government. Prime Minister has lost control over his ministerial colleagues. Engaged in the populist programmes, government has failed miserably, in legislating the pending bills in the parliament, ‘Time’ complained.
Prime Minister himself has conceded number of times that health of the economy has been deteriorating. According the Central Statistical Organisation (CSO), growth rate of GDP has shrunk to only 4.5 per cent in 2012-13.
PMO’s Response
Responding to the criticism that Prime Minister remained silent and has been weak during his tenure, PMO has refuted the same and stated that during 10 years of his tenure as Prime Minister, he delivered 1198 lectures at different occasions and issued 1600 press statements. Rather PMO has blamed the media for not giving due coverage to the achievements of the Prime Minister on the development front. However, the PMO has preferred not to say anything on the duality of power at the centre.
In this context, it is important to underline the fact that due to the existence of dual power centers, the other centre of power namely Congress President Sonia Gandhi, got more attention in the media. This cements the perception that the government was being run through the office of the Congress President.
Regarding achievement of the government, an important argument which has been made is that in the last 10 years, GDP has tripled, is factually incorrect; as during this period real GDP has increased by 107 percent. Yes, if we take GDP at current prices, the same has nearly quadrupled. It seems PMO wants to take credit of soaring of money GDP due to high inflation.
Veracity of UPA’s claims
In reality, the last three years of UPA’s rule, have been the worst in the last 20 years. During these years, effects of ill conceived policies and mismanagement of the economy have become perceptible and growth has decelerated to 6.2 percent, 4.5 percent and 4.5 percent (expected) in the year 2011-12, 2012-13 and 2013-14 respectively, after reaching high growth rate of 8.9 percent in 2010-11. It is notable that between 1998 and 2004, positive effects of BJP led National Democratic Alliance’s (NDA) policies, brought the economy out of the clutches of syndrome of low growth rate. If we see, up to fifth five year plan, GDP growth could not cross more than 5 percent in any five year plan. Even later plans could not take the growth figure beyond 6 percent. When NDA took over the reign of power, growth increased in leaps and bounds; barring a couple of exceptional years, it kept on accelerating, before reaching a high of 8.2 percent in 2003-04. That means country could manage to come of out of the vicious circle of so called, ‘Hindu Rate of Growth’ a term coined by American Indian economist Raj Krishna. After crossing the psychological barrier of 5 percent, growth rate remained high, even during UPA rule.
Twin Deficit
It is notable that the economy has been facing huge fiscal deficit as well as deficit on current account in balance of payment (CAD) in the last more than three years. The result is soaring internal and external debt, depreciating rupee and high prices. If we look at the NDA rule, in the last three years of NDA regime, balance of payment had gone into surplus zone. Surplus in balance of payment comes when our receipts of foreign exchange exceed those of payments. Though we continued to have some deficit in the balance of trade even during NDA regime, however surplus on invisibles, primarily due to receipts from software exports and NRI remittances had exceeded the deficit in the balance of trade.
Though UPA Government does not leave any opportunity to pat its back, it is a fact that not only that our growth has started decelerating, many people started saying that we are approaching back to ‘Hindu Rate of Growth’. Inflation which had dipped to 3 to 4 percent during NDA regime has again reached double digits. Common man is under deep distress.
Rising inflation is causing rising interest rates and high interest rates in turn are pulling the economy down. Continuously high rate of inflation in the last few years has started eroding the competitiveness of Indian economy. Costs are rising, both consumer demand and investment demand has come to a standstill. In the recent quarter industrial growth has gone into negative zone, which implies that industrial production instead of rising has actually started going down.
There is a general perception that corruption during the present regime is not only causing inflation, it is blocking the road of development and also making the people poor and jobless. For all this, weakness of leadership is responsible.

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