Dual centres of power

The last three years have been the worst in the last 20 years as effects of ill-conceived policies and mismanagement of the economy became perceptible.

The issue of the dual centres of power in the government and the Congress party, especially its chief Sonia Gandhi and the not so strong prime minister, Manmohan Singh, is not new. However, following revelations by the book authored by the PM’s former media adviser Sanjaya Baru and another by former coal secretary P C Parakh, these issues have once again warmed up in wake of elections. These revelations have brought out the broader issue of independence of decision-making by the PM.

According to the Constitution, parliament is the supreme decision- making body and the PM is at the centre of the power. Not only the selection of Cabinet but the appointment of governors and other constitutional positions, are all made on the basis of the recommendations of the cabinet under his/her chairmanship.

Revelations that important files of the PMO were seen by Sonia Gandhi, in Baru’s book, not only raise questions on the autonomy of the Prime Minister Office (PMO), but also the dignity of the PM.

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, Baru has made it a point of public discussion. This is not the first time that such issues have been raised.

Self-confidence of the PM has been dwindling in the last three years of UPA-II government. He has lost control over his ministerial colleagues. Engaged in the populist programmes, government has failed miserably, in legislating the pending bills in the parliament as Time magazine complained. The PM himself has conceded a number of times that health of the economy has been deteriorating. According the Central Statistical Organisation (CSO), growth rate of GDP has shrunk to 4.5 per cent in 2012-13.

Responding to the criticism that the PM remained silent and has been weak during his tenure, the PMO refuted the same and stated that during 10 years of his tenure, the PM delivered 1198 speeches on different occasions and issued 1600 press statements. Rather, the PMO has blamed the media for not giving due coverage to his achievements 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 centres, the other centre of power - 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, which is factually incorrect; as during this period real GDP has increased by 107 per cent. 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.

Worst three years

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 per cent, 4.5 per cent and 4.5 per cent (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 the Fifth Plan, the GDP growth could not cross more than 5 per cent in any of the five year plan.

Even later, plans could not take the growth figure beyond 6 per cent. When NDA took over power, growth increased by leaps and bounds; barring a couple of exceptional years, it kept on accelerating, before reaching a high of 8.2 per cent in 2003-04. That means, the 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 per cent, the growth rate remained high, even during UPA rule.

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, surplus on invisibles, primarily due to receipts from software exports and NRI remittances had exceeded the deficit in the balance of trade.

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.