Pranab Mukherjee's budget has left this crucial message in unmistakable terms. Most of us do downplay the clear schism in the emphasis between Mukherjee's budget priorities and the old reform schedule. But the hushed protests from the old reform warriors say it all. The bolder of them have advised the government not to 'shy away' from the reform path. They want the government not to say 'proudly' we are committed to complete the reform process. Yet no one in the government, not even the loud Kapil Sibal, has made any such public assurance. On the other, even the Finance Minister showered praise on Indira Gandhi for the 'wise and visionary' nationalisation of banks and life insurance. This kind of PSU defence was unthinkable even a year back.

The reform lobby has many explanations for the sudden change. One is that Mukherjee wanted to be too cautious in peddling reforms at one stroke. He would do it in stages and in small dozes; he has not dropped disinvestment, only wanted to amend the National Investment Fund rules to use the family silver for bridging the budget deficit; he also has to mollify allies like Mamata and Karunanidhi, who are still allergic to disinvestment. Even if such explanations are true, Mukherjee's own words contradict such optimism. For instance, for the first time after the 1991 budget, a Finance Minister has avoided the reform rhetoric.

Mukherjee has made it clear that banks, insurance and financial institutions will be out of the disinvestment ambit. No Finance Minister since 1991 has made any such commitment. There will also be no 'strategic sale' - selling to a favoured firm - of PSUs. Instead, disinvestment will be the favoured route. That too, it will be 10 per cent at a time and up to a maximum of 49 per cent. The government will ensure that the character of the PSUs will not change. The disinvestment will be to use the funds for financing social programmes. All this commitment came suo motu, without any Left threat or known Mamata warning.

An experienced leader like Mukherjee could not have made such a sudden shift without proper deliberations. Hence the UPA's first post-victory budget truly reflects the party's subtle shifts in its economic and political strategy. It has two elements. First, the Congress is determined to enforce all of its inclusive social programmes - more than half a dozen flagship schemes - irrespective of the cost involved and whatever the opposition from the reform fundamentalists. On this, there is no compromise. The budget signals a calculated political risk, even at the cost of a 8-9 per cent deficit. The Congress establishment will not compromise on this point.

Second, the Congress is not in favour rushing with the whole lot of old liberalization schedule nor considers the reformsmriti as something divinely ordained. Even the government's advisers and close aides had missed this crucial shift in Congress position. That is why the Economic Survey happen to put forth the whole range of three dozen reform programmes for immediate implementation by the government. Such sharp conflict between the budget and Economic Survey is unusual. And the Finance Ministry is clearly unhappy with the why the reform lobby had tried to force things on the government. Again, a day after the budget, a senior official leaked out to the media the government's move to scrap National Investment Fund to facilitate the use of share sale proceeds to meet the revenue deficit.

Curiously, the next day, a very senior minister bluntly contradicted any such move. The first signal of the UPA2's policy shift had come even before the swearing-in. The party bosses curtly shot down a move to put reform mercenaries like Montek Singh Ahluwalia in finance and Kapil Sibal in foreign office. Instead, the party wanted mature politicians who will follow a middle path. For corporates and reform thekedars, there is one crucial truth: reform is no more the Congress priority. Instead, it will concentrate on its poll-oriented flagship programmes. If some of the unfinished reform proposals are found useful, the government will go for them. But there is no question of tick-marking an implementation schedule dropped down from abroad.

As an emerging power with sufficient self-confidence, it is aware of its economic potential. It need not ape all that others did and get into trouble. After the global financial collapse, there is a let-up in sermonising by the world bodies. Mukherjee himself has cited how Indiraji's vision helped India tide over the global tsunami. While our desi reformers are harping on more future trading in farm products, reports from US this week talked of the move to ban similar trading in oil and gas to check speculation and profiteering. Thus the UPA's new economic approach stems from its growing trust in its ability to manage things on its own experience.

If the Congress establishment is drawing up an economic roadmap free of any doctrinaire reform baggage, it is also an extension of its new strategic political positioning. After the 2009 triumph, the party is being called upon to engage in a long war of nerves to win widely varied vote banks spread over the country. For this, it will have to build a strong power alliance of the corporates and elites, aspiring middle classes and rural poor. This is a new version of the old heterogeneous formula that had traditionally sustained the Indian National Congress.

Another subtle change has been a virtual power shift within the UPA2. Under UPA1, Sonia Gandhi had consciously avoided dealing directly with the ministers. This time hyperactive ministers like Sibal have forced frequent interventions by the party managers to prevent embarrassing mix-ups. After L.K. Advani's apology, the 'weak-PM' stigma no more haunts 10 Janpath. And it does not have to save the PM from the Left onslaught. Yet there are signs of a left-right line-up within the UPA2. But no speculation please: the PM has already set up a unit in PMO to monitor the UPA's populist flagship projects. (IPA Service)