1 March 2013: The sins of the United Progressive Alliance regime have inevitably and indubitably seized upon P.Chidambaram’s last budget and turned it into a non-starter. When loot is the name of the game, entrepreneurship is considered blasphemy, and the spending power of the salaried classes is hit by frozen and diminishing incomes, spiraling prices and rising taxes on consumables, how can a single event like the budget make anyone feel good? For the dismal state of affairs, blame Sonia Gandhi and Manmohan Singh in that order. And this writer never had illusions about Chidambaram as finance or home minister, regardless of his Harvard pedigree. Forget about 6.7 per cent projected growth. The December quarter ended at 4.5. Count yourself lucky if it doesn’t get worse in the coming year, which is more than likely.

A sensibly-run economy would rob the budget-presentation ceremony of all its colour, faux excitement and manufactured hope. A country’s economy is strictly not an economy but a political economy. Politics commands and directs economics, not the other way round. Two of India’s most successful prime ministers, P.V.Narasimha Rao and A.B.Vajpayee, understood this instinctively and intuitively. They provided the broad overall vision to their respective finance ministers, Manmohan Singh and Yashwant Sinha, who then worked out the nitty-gritty. Narasimha Rao and Vajpayee took the risks, which is why the economy boomed under their tutelage.

The other important factor to note is that Narasimha Rao and Vajpayee were home-grown politicians. Having been intimate with grassroots movements, supremely knowledgeable about the ground situation, and genuinely concerned about the people, who were not to be manipulated as votebanks, they had a fair idea of what was wrong, and what needed to be done. About the political economy, few of their contemporaries knew more. For a seasoned politician such as Narasimha Rao, it would come as no surprise that the small and medium enterprises (SMEs) powered the growth story post the 1991 unshackling of the economy. Big industry when not complaining about a level-playing field was much too wary of the deep, dark and uncharted waters of market economy to promptly step in. And Narasimha Rao did not crow about the so-called reforms. It had to be done, like it or not, and it would fetch no votes. He knew and he said so that “reforms” could not be electorally “packaged”. In other words, it was the due and the entitlement of the public. The state had to get off their backs and focus on health, education, and the like. It is odd and not a little ugly, therefore, to see the PM and his finance minister strut about as “reformists”. And in the real sense of the term, they are not.

Or consider Vajpayee. He put his finger perfectly on the political economic necessity of highway connectivity. Manmohan Singh was either so small-minded or else fiercely dictated by base Congress politicking that he de-prioritized Vajpayee’s golden quadrilateral and subsidiary schemes until its dire necessity forced a comeback. The river interlink plan which would have produced miracles such as did the Rajasthan Canal was more decisively and cynically terminated since it formed the core of Vajpayee’s vision. Vajpayee aimed to teach the most number of people to fish, but the United Progressive Alliance has made the same people dependent on handouts such as NREGA, and this has destroyed the aspirational energies of the economy. In his two terms, what can Manmohan Singh claim credit for in the political economy? He and Sonia Gandhi have driven the economy into a ditch.

In their regime, official looting is brazen and in-your-face. 2G, CWG, Choppergate, Coalgate, Vadragate, Antrix-Devas… The list seems to grow by the day. Everyone knows about the corruption and the venality of the Indian Administrative Service and the Indian Police Service, but officers of the Indian Revenue Service have conceivably sunk the lowest. They are some of the biggest extortionists operating in government. They think nothing of turning the screws on honest businesses (that are forced to pay bribes), whilst looking the other way as the dodgers and evaders flourish. Do you think, for example, that the wholesale merchants of Delhi’s Khari Baoli or the jewelers of Karol Bagh pay the full taxes? Perish the thought. Service tax has become another smutty place. Those who play by the rules suffer, whereas defaulters get the benefit of amnesty schemes.

Is it any surprise then that honest businesses do not wish to make more investments in the country? Investors need a clean and stable environment. The United Progressive Alliance has not been able to provide that. Businessmen will tell you that India does not need foreign direct investment. There is enough and more capital within the country to fuel growth. But till the United Progressive Alliance is in power, those monies will remain locked up. Entrepreneurs are through with Manmohan Singh. Till he is around, and his government is in power, India’s growth story will remain a nice piece of unwritten fiction. Things will get a lot worse before they get better after 2014 under a non-United Progressive Alliance government. Hunker down, hold on to your money in gold, and pray.