“I don’t know how much more we can expect — they don’t have the political capital or the numbers to have greater reforms after this,” said columnist Ashok Malik, arguing that the speech lacked a broader sense of direction.
“He explained we have to tighten our belts, but where is the vision, where is the big picture, where is the dream?”
In his taped address, Singh defended his decision to cut subsidies for diesel by saying that “money does not grow on trees,” and warning that India could not afford a collapse in investor confidence suffered by some European countries.
He also pointedly reminded India of the reforms he unleashed as finance minister in 1991, when the country faced a much deeper foreign exchange crisis and he put into place far-reaching measures to liberalize the economy, setting it up for two decades of unprecedented growth.
But Singh’s reputation has fallen sharply in the past two years as the economy has slowed and his government has been mired in a series of corruption scandals, with the prime minister apparently watching impotently from the sidelines.
Difficulty in ‘resolute steps’
To some extent, the recent burst of reforms, coupled with Friday’s speech, seemed like an attempt from Singh to reclaim his legacy, just five days before his 80th birthday.
“The last time we faced this problem was in 1991,” he said, an Indian flag and a bust of independence leader Mohandas Gandhi behind him. “We came out of that crisis by taking strong, resolute steps. You can see the positive results of those steps. We are not in that situation today, but we must act before people lose confidence in our economy.”
The fact that Singh had to make a national address to defend a relatively modest package of reforms underlines how little political support exists for economic liberalization, even today. That he harked back to the 1991 crisis underlines how deep the malaise has become in the past year.
The problem, columnist and author Shankkar Aiyar said, is that successive Indian governments make bold decisions only in the midst of a crisis. That makes for haphazard policymaking, and limited follow-through.
In essence, India’s path toward becoming a more open, prosperous global power is unlikely to ever be smooth.
“In India, things must get worse before they get better — and sometimes even that doesn’t happen,” said Aiyar, whose forthcoming book, “Accidental India,” explores this dynamic. “But when the crisis fades, you say goodbye to reforms.”