22 June, 2021

A Promise Belied

Is the suspension of divestments the beginning of the end of reforms?

A Promise Belied
It was a small stone hurled at the seemingly placid waters of the Indian economy, but the ripples went far and wide. On July 6, the government announced that "taking into account the concerns (of some of the UPA constituents and allies), the prime minister has decided to keep all disinvestment decisions on hold, pending further review". This came just three days after Manmohan Singh said he was "not unambiguously attached to reforms" and we "must compete with the world on our own strength". It was as if the curtains had dropped on economic reforms after two years of flip-flops.

Worse was to come. A whisper campaign that the PM may resign, as he was piqued by coalition pressures and stung by the way his ministers were pursuing independent agendas. As finance minister under Narasimha Rao, Manmohan had offered to resign thrice; so it was easy for the rumour to grow wings. Instantly, markets tumbled, analysts frowned and the world sat up and took notice. Russia’s Pravda described Manmohan as "the boy who stood on the burning deck"; most...

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