Policy paralysis

In a less challenging economic clime and times the India summit of the World Economic Forum, which concluded in Mumbai on Monday, would have attracted greater attention. Though it is when the going is bad that the ideas and proposals that emerge from such consultations are more useful, the discussions at the summit did not actually throw up many of them. No fresh light was shed on many of the issues which did come up for discussion. In fact the summit itself was not considered important enough to be attended by many of those who had participated in its earlier versions.  Prime minister Manmohan Singh and finance minister Pranab Mukherjee were conspicuous by their absence. The prime minister had in the past always tried to present the India story to the world from this forum. Many  important delegates from outside the country were also missing. The lack of excitement was clear.

This was underlined by the strong message that was sent out by the leaders of Indian industry and business who attended the summit.  The lack of  excitement about India is more a result of the problems of governance the country has recently come under than of doubts about its potential.  All the speakers used the forum to warn the government that its policy paralysis and inability to take decisions have stalled the economy at a crucial stage. India’s business class is usually reticent in their expression of disapproval of government. But it is perhaps a sign of despair that they have aired their disappointment with the government so strongly. Azim Premji and Deepak Parekh had recently expressed such sentiments and now it is clear that their views are collectively shared. One business leader said that it was almost impossible to do business in India now. This is being heard for the first time after the end of the licence permit system.

There was a call for an agreement between political parties and faster action on policy issues. While democratic consensus on policy issues is needed, it should be noted that the responsibility for delays and inaction on them mainly lies with the government. The situation that the government finds itself in now is its own creation and not thrust on it by the opposition. Business leaders have their interests and there is no need for the government to implement their agenda. But the point is that there is no action on any agenda.

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