What a change. The last time a Congress government was voted to power in Delhi, in 1991, it had inherited an economy in tatters. Inflation rate was running at 15 per cent, foreign-exchange reserves had shrunk to less than $1 billion and the GDP growth rate had slipped to just 1.3 per cent. Even more significantly, India was forced to beg for money and had to pawn its gold. "It was a deep national humiliation," was how the then finance minister Manmohan Singh had described the situation.

Thirteen years later as Manmohan prepares to head a Congress-led coalition in Delhi, the economic landscape looks vastly different. Consumer price inflation is below 4 per cent, foreign exchange reserves are overflowing at $113 billion (Rs 5,08,500 crore) and GDP growth is at a sparkling 8 per cent plus. Perhaps the sharpest contrast since 1991 is that the country is now pre-paying its external debt. Even the list of pending legislation in Parliament doesn't seem as long as it did two years ago. Some of the thorniest economic legislations-the Fiscal Responsibility Act, the Competition Act, and the Securitisation Act-have been cleared in the past two years.

Does the strong economic inheritance presage well for the future of economic reforms? The Congress' own history doesn't suggest so. Having brought reforms to a complete standstill in the second half of its last stint in the government (i.e. between 1994 and 1996) when the economy had actually become stronger, the party has earned the reputation that it is good only at undertaking crisis-driven reforms. The reforms needed to avert a looming crisis. Its ability to undertake strategy-driven reforms in the absence of a crisis is untested and unproven.

But judging the Congress' ability to reform on the basis of its performance eight years ago may not be fair. After all, it had taken more than a year for the BJP to emerge out of the shadows of the Swadeshi Jagran Manch and the RSS in economic policy formulations. In the months to come Congress too could conquer the conflicts with Left parties on policy issues. The conflicts that remain may not turn out to be daunting.

Take privatisation for instance. The Congress has never been in favour of selling profitable public-sector companies-neither is the Left. The Congress has never stated it would modify labour laws-neither has the Left. The Congress has favoured value added tax (vat) replacing sales tax-so has the Left. Reduction in subsidies and foreign investments could be the potential flash points and both are unlikely to be addressed immediately.

An issue that will have to be attended to within weeks is of petroleum prices. Having refused to raise oil prices despite a sharp hike in global crude prices, the NDA has passed on a hot potato to the new government.

That, however, is minutiae. When it comes to broader reforms, the Congress has come a full circle. Just as the United Front and the NDA governments found it impossible to deviate from the policies initiated by the Congress, the new Congress-led government too will find it difficult not to continue the policies of the NDA government. Besides, if Manmohan could turn around the worst ever Indian economy in 1991, he can surely ensure that the gains of the robust economy he inherits now aren't frittered away.