The report makes great play of economic growth and the international prestige of India – a “marvel” as the Prime Minister once put it – and of the country outgrowing the global crisis as if it was something unique to India when there are many examples of countries overcoming it with resilience, within their own limits. But that does not and cannot make up for all the shortcomings in governance, which are conveniently brushed aside or sought to be palliated through fresh reaffirmations of good intentions. Increasingly over the last year, the question raised all over is ‘when will this government begin to deliver?”

Have we not heard before, year after year, the listing of problems and challenges and resolve to tackle them? Take, for instance, what is recognized as need for “better prices for farmers, better policies, better access to technology, infrastructure and markets” etc. It is the UPA Government’s signal failure to treat agriculture as a basic priority to ensure sustained growth – which would have helped to overcome supply constraints and usher in the promised “food security” for the majority of low-income population.

Constant assertions of highly comfortable food stocks did not rescue millions from the grip of high cereal prices since 2008. Even today, cereal or other prices have not come down to make a difference, and what Government gloats over as decline in food inflation is the relative slowdown in the pace of acceleration as compared to the previous year (“base effect”). Nor were these stocks, which are allowed to rot, drawn upon, at the height of foodgrain inflation, to bring down market prices. Where upfront actions were called for, we had haphazard steps like a ban on something or a duty adjustment for another.

In short, this Government notoriously paid lip service to inflation for two years, and has only lately begun to realise how ruinous it could become to its own growth ambitions - not that it cared as much on how millions of people had to bear the burdens, ordinary folks outside the reach of Government. However, inflation now becomes a 'major concern'. Helplessly it had left it to the central bank to try to counter inflationary pressures in moderate ways that took care of productive forces and growth. Now that there has been a renewed surge in global commodity prices, at a time when domestic inflation had generalised itself, Government has no option but to toe RBI’s line, as enunciated in its Monetary Policy Statement 2011/12 (May 3) that “current elevated rates of inflation pose significant risks to future growth. Bringing them down, therefore, even at the cost of some growth in the short-run, should take precedence”.

Government has conceded that inflation and continuing uncertainties in recovery in advanced economies makes a revision of the budgeted growth target of 9 per cent unavoidable to between 8 and 8.5 per cent while RBI more cautiously places it at 'around 8 per cent'. The inflationary phenomenon had already led to an investment slowdown and the prospects are gloomy with oil prices rising well above 100 dollars a barrel. The Prime Minister has talked of the need for a “rational pricing policy” for fuel products to lessen the burden of subsidies and for reduction of fiscal and revenue deficits. These require tough decisions. In any case, fiscal and monetary policy will have to be made to work in tandem to impact on inflation and ensure sustainable growth. Overall, thus far, a balanced approach to the problems of the Indian economy has eluded the policy-makers.

In its two years so far, UPA-II claims to have provided political stability and economic growth but there has been little progress on economic reforms, mainly in the financial and investment sectors, even when it is no longer hamstrung by the Left nor has there been a vigorous push to infrastructure. The pending issues, legislative and in the realm of policies, whether in regard to land acquisition, mining, manufacturing or food security are all so demanding that continuing failure to grapple with them energetically could undermine what little credibility is still left for UPA-II.

If the recent state elections had to be reckoned as a factor for slow movement in decision-making, UPA-II must now get going with the economic agenda in the coming months including major tax reforms, the Direct Tax Code already before Parliament and the Goods and Services Tax (GST) though on the latter, the Centre and the States have to agree on basic issues including rates. Against the background of formidable problems, political and economic, confronting the UPA-II, there were few cheers for its celebratory stance on completing two years.

Admittedly, UPA-II, which came to power with hubris, had not been on guard against mis-governance and corruption which has brought down its image unlike anything before. In the most serious of cases of corruption, the 2G scam led to the downfall of the DMK regime led by Mr Karunanidhi and a near wash-out for the Congress in Tamil Nadu, with only six wins out of 63 seats for which it contested in the assembly election in partnership with DMK. In all these cases of graft, far from being pro-active, UPA was goaded into action by the Supreme Court or CAG or sources outside.

The Prime Minister Dr Manmohan Singh has acknowledged the “legitimate concerns” arising out of the “confluence of scams”, and says Government is determined to take corrective action. On the occasion of presenting UPA’s report card on May 22, the UPA Chairperson Ms. Sonia Gandhi joined in reiterating that corruption would be taken “head on” and that the Lok Pal bill would be brought up before the monsoon session of Parliament. There are competing legislative priorities for the forthcoming session and Government would have to tread warily in the midst of opposition roars.

Politically, UPA can draw no comfort from the latest round of state elections barring Assam, though the political managers misread it as a vote in its favour, or in the emerging scenario in other states, notably Andhra Pradesh where a fast-developing political crisis could pose a major challenge for the Congress to retain its strong base there since 2004. There are political rumblings in the wake of Mr Jagan Mohan Reddy’s revolt against Ms. Sonia Gandhi, his spectacular victory defeating Congress and TDP rivals in a Lok Sabha byelection, and claims of leading a sizeable number of Congress MLAs into a rival formation. Telengana, already on the boil, awaits the Centre’s next step on the issue of its separation from the rest of the present Andhra Pradesh. More other state elections due next year, especially Uttar Pradesh, could also throw up new problems to complicate the outlook for UPA in 2014.

Economically, growth is not in any way reducing income disparities, and the World Bank says that while India’s global profile is rising, it has the largest concentration of poor – some 456 million people – and significant lags in health and nutrition targets. Progress in enrolment is not accompanied by improvement in quality. The state of basic and secondary education is “dismal”. The priorities listed by Dr. N Okonjo-leweala, Managing Director of the World Bank, in New Delhi recently, include agricultural productivity, removal of institutional constraints for better service delivery, quality of education and women’s participation in development processes, all of which could make for a 'more equitable India in 20 years'. (IPA)