One Singh has told the Congress what another Singh probably wants to: create a political environment conducive for reducing subsidies.
Planning Commission deputy chairman Montek Singh Ahluwalia has told Congress MPs that subsidy cuts are essential if India has to preserve its growth momentum — a statement more in line with the known views of Prime Minister Manmohan Singh than the populist line preferred by many Congress leaders.
Many Congress MPs, acutely worried about their future because of the hostile political climate, were taken by surprise by Montek’s prescription as they are expecting populist measures to turn the tide.
The conflicting perceptions between two sets of people in the government and the Congress reflect the dilemma that has crippled decision-making in UPA-II.
Montek’s exhortation came at a special workshop today for Congress MPs and AICC office-bearers, organised by the Rajiv Gandhi Institute of Contemporary Studies. The party leadership, which felt the need to educate MPs and office-bearers on issues of national importance, had requested the institute to convene such interactions.
Today’s briefing was on the economic situation, and the party leadership took pains to ensure good attendance by scheduling the meeting in the morning, hours before the start of Parliament at 11am.
But around 25 MPs and less than five AICC office-bearers chose to attend the meeting, indicating disinterest in topics that do not fall in the category of bare-knuckled power politics. The Congress has over 280 members in both the Houses and around 50 office-bearers.
The essence of Montek’s arguments at the closed-door session was that India cannot sustain the subsidy regime any longer and the county can end up like Italy and Greece if the course was not corrected immediately.
Repeatedly stressing the fact that he was not in Parliament, Montek entreated the MPs to generate support for the reduction of subsidies. He said managing the fiscal deficit was the prime concern of senators in the US while Indian politicians were interested in subsidies.
The plan panel boss referred to the high subsidy bills on diesel, fertiliser and food and wondered how the government would manage its finances once the food security bill brings additional burden.
Montek added that fertiliser subsidy should not go to the chemicals and fertiliser ministry but to the agriculture ministry which was better equipped to ensure rational distribution. He questioned the logic behind the entire subsidy going to chemical fertilisers, which was having an adverse impact on the soil.
Sources said most participants were puzzled as they expected a general lecture on the economy, not a pinpointed thrust on subsidy reduction. Although Montek did not suggest any timeline, the MPs wondered if this was the right time to moot such a plan.
AICC secretary P. Sudhakar Reddy asked Montek to tell the MPs how to explain rising prices of essential commodities to common people who have no time for complex jargon. Shashi Tharoor, too, expressed concern at the high inflation.
Party MP Jagdambika Pal, without contending that subsidy reduction was not the MPs’ prime concern, raised issues like rampant misuse of MNREGA funds in most states. AICC secretary Pankaj Sharma tried to draw Montek’s attention to the “BPL controversy”, saying greater clarity was required to identify those living below the poverty line.
Montek didn’t have clear answers to such questions, the sources said.
Some MPs who could not attend the session expressed concern about the emphasis on reduction of subsidies at a time the party is under attack on several fronts.
One Rajya Sabha MP said: “If at all a workshop had to be organised today, it should have been on how to counter the adverse fallout of CAG report on coal blocks. Our workers are demoralised and they say the number of zeroes used to define the loss figure would drown the Congress in the next election.”
Although the party leadership and the Prime Minister are said to be keen to strike a balance between the reforms agenda and welfare schemes, the majority of party MPs feel the government will not survive without drastic steps that could pacify the poor and the middle class.
The MPs do not appear to be opposed to decisions like allowing foreign direct investment in multi-brand retail but they do not favour ending the subsidy regime at this stage. On the contrary, many MPs want the government to think of something akin to the Rs 70,000-crore loan-waiver announced by UPA-I before the 2009 election.