Budget 2011: Way forward: courtship & concessions

Pranab Mukherjee may have promised an end to policy drift and decisive reforms in his budget, but progress on critical legislation will require quite a bit of courtship with the Opposition and substantive concessions on policy issues. In his address, Mukherjee sought bipartisan support for tax reforms as financial sector legislative initiatives. But the problems lies in working out a non-partisan consensus.

The recent finger pointing between Congress and BJP over the prime minister’s statement that the Centre’s reluctance to go slow on former Gujarat home minister was holding up GST, for one, is not conducive for productive deal making on the economy. Nor is the prime minister’s statement, putting all the blame for the winter session deadlock on the Opposition.

On both occasions, Mukherjee reached out to BJP leaders for damage control. The finance minister, who has been negotiating with chief ministers on GST, knows it’s not a partisan stalemate. That several chief ministers, including those controlled by allies, have problems with the GST draft makes it imperative that the issue be sorted out through some concessions to states. All governments face problems with policy movement. For a government like UPA-II, with a high credibility deficit, the task is even more arduous.

Mukherjee admitted the problem. “Certain events in the past few months may have created an impression of drift in governance and gap in public accountability.” The impression that has gained ground of the government being stone deaf cannot be washed away by candid confessions. Proactive steps are needed to stem the rot. And route to breaking legislative impasse lies in some outreach, back channel communications and even social backslapping with the Opposition.