There have been irresponsible Prime Ministers like Vishwanath Pratap Singh, who unleashed a caste war. There have been unlucky Prime Ministers like Chandrashekhar, who lost power merely because Rajiv Gandhi changed his mind. There have been somnolent Prime Ministers like Deve Gowda, who refused to be disturbed by the most serious problems. And there have been Prime Ministers who went on a spending spree, like Manmohan Singh. He has had the opportunity to watch all those Prime Ministers, as well as more active and attractive ones such as those of the Gandhi family. He must have reflected on their errors, and worked out how to avoid them. He returns to the office with more experience than any of them, including his own first incarnation.

While experience may sit heavily on him, he comes back lightened of some other burdens. He has fewer allies to work with. They have seen him deftly change horses in the midstream, so they must be aware that if they misbehave, he will jettison them and find new horses. They are allies he has worked with before without too much friction; they have learnt to milk their own ministries and keep out of other ministers’ way. So now the prime minister can be assured of some freedom of manoeuvre in shaping the major policies of his government.

He is a man of great patience, but for once it would not be unnatural if he began to run short of it. He may well get a third term as Prime Minister; nothing is impossible in politics. But if he wants to leave an imprint on India, it is time he started working on it. It would be quite appropriate for him to be somewhat more energetic, assertive, and entrepreneurial. If he has animal spirits, now is the time to let them rip.

There are some hints that he is feeling more energetic than is his wont. The first hundred days of his last stint had little to show; the only significant events of that period were the formation of the National Advisory Council, which Sonia Gandhi stopped attending almost as soon as she formed it, and the arrest of Shibu Soren for murder. This time the Prime Minister is reported to be working on things to be accomplished in his first hundred days. The process is as sloppy as only Congress governments can make it. In his consultative style, the Prime Minister has asked the ministers in place for ideas, and their ministries are leaking out half-baked ideas to the press. Some of them, like an agricultural revolution that Kamal Nath has talked about, may need 100 months rather than 100 days; others, like his talk of achieving 8 per cent growth, cannot even be monitored in a hundred days, let alone achieved.

This grapeshot approach to policy is full of hazard, and can yield no rewards. The Prime Minister has another, closer deadline — the budget. A July date is being talked of; it is too soon, and the budget is so late that there is no hurry any more. The government should take its time. And for once, the Prime Minister should take a serious interest in it. It should address the five most urgent economic problems this government faces.

First, Manmohan Singh’s previous government wrecked the fiscal balance; it has to be restored. It may be argued that reducing the deficit is the wrong thing to do in a slump. But the fiscal deficit is financed in our system by banks, and thus directly deprives productive sectors of credit. Its reduction is better carried out by reducing expenditure rather than increasing taxes because the government has vastly increased unproductive expenditure.
Second, the government must reduce subsidies, which are the prime component of the unproductive expenditure; and it must target the remaining subsidies better to reduce the corruption they generate.

Third, instead of spending too much, it must give incentives to productive expenditure, and especially to industrial investment. This may be done by means of subsidies, tax incentives or both.

Fourth, it must take steps to improve the balance of payments. The best means for this is depreciation of the rupee. But this is also a good time to give credit to neighbouring countries to buy from India. Pakistan and Sri Lanka would be good candidates; credit may give us some leverage with them.

Finally, this is a good time to give the sinking information technology industry a boost by increasing government demand. But that must not be done by low-level computerization as has been done hitherto. The government should take the help of IT firms to redesign its administrative processes; it must increase efficiency and make itself more citizen-friendly.