Goodbye reforms?

Communist leaders, almost as a rule, have never betrayed a sense of humour. So, no one laughed when CPI(M) General Secretary Prakash Karat “joked” that although the UPA-Left honeymoon was over, the loveless marriage could continue.

Then, after the party’s politburo meeting on Saturday (August 18), he reiterated the Left stand that “going ahead with the nuclear deal with the US would not serve India’s interests.” The politburo of the CPI(M) has not endorsed the stand on nuclear cooperation, he said. The party’s dilemma is obvious.

Marxists, who thrive on “anti-imperialist and anti-US” rhetoric, obviously, cannot be seen endorsing a deal that is perceived to bring India into the US sphere of influence.

Prime Minister Manmohan Singh, on the other hand, has also dug in his heels and said the deal is non-negotiable. More importantly, Congress President and UPA Chairperson Sonia Gandhi has publicly endorsed his stand. Singh has staked his political future on this landmark, and, by most unbiased accounts, good and reasonable, deal. He, obviously, cannot backtrack without losing face and sacrificing his authority. That brings us to the big political question: how do two honourable men of unimpeachable integrity, work out a compromise without surrendering their dearly held positions?

At stake, apparently, is the survival of the government, but a senior CPI(M) leader, speaking to BT on condition of anonymity, gives voice to the Marxist dilemma. “We aren’t keen to bring down the government,” he says, adding that “there should at least be some discussions among UPA partners, and that is still possible.”

Despite the public posturing—and the strident voices emanating from smaller parties like the CPI, Forward Bloc and RSP—the CPI(M)’s moderate faction (comprising leaders like Buddhadeb Bhattacharjee and Sitaram Yechury) is unlikely to allow it to rock the boat beyond a point. A pointer to this was an almost unnoticed comment from Karat.

“The politburo decided to take the issue of the nuclear agreement and the dangers of the strategic alliance with the United States to the people through a nationwide mass campaign,” he said. The bark, then, may be worse than the bite.

But the survival of the government may prove to be a pyrrhic victory. It is almost certain that this breach in UPA-Left ties will bring the economic reforms process to a halt. That means no pension reforms, no banking reforms, no insurance reforms and no more liberalisation of the retail, education, agriculture and labour sectors—at least till the next general elections which are due in 2009.

These are critical steps that the country has to take in order to sustain and step up the current rate of growth. Failure to walk the talk on these will result in the growth momentum flagging, and that’s a scary thought.

Says Congress Spokesman Abhishek Manu Singhvi: “We understand the concerns of the Left. Our decisions are based solely in national interest and we have ensured that India’s security has not been compromised.” He, however, declined to comment on the economic consequences of the deal.

One positive fallout of this, the Left leader says, could be felt at the state level. With the Centre unable to force the pace on reforms, reform-minded Chief Ministers like Bhattacharjee, Narendra Modi (if he survives the current round of bloodletting in his party’s Gujarat unit) and Naveen Patnaik may be forced to step up the tempo of reforms in their respective states, where they have to deal with popular expectations. But that will still not compensate for the opportunity cost of Marxist intransigence.

Reports by Amit Mukherjee and Ritwik Mukherjee