Dec 14, 2013

2013 Assembly Elections: It's a Verdict Against Economic Policies.

Sonia Gandhi thinks that failure to stymied corruption and check rising inflation cost the Congress party dearly in the state elections. Media analysts opine that the dominant Narendra Modi factor resulting in a 4-0 tally for the BJP actually catapulted stock markets to rally high. Markets love strong and powerful leadership.

But there is more to the 2013 elections than what is being seen on the horizon. The dramatic turnaround by the Aam Aadmi Party (AAP) to the electoral fortunes of the Congress in Delhi, and at the same time the decimation of the Congress in Rajasthan, Madhya Pradesh and to some extent in Chhatisgarh shows that the verdict was not only against corruption and inflation, but was more or less aimed at the overall flawed economic policies that the UPA has been aggressively pursuing for nearly a decade now. Big ticket corruption and inflation were merely a symbol of the growing inequality and economic injustice that people were fed up with.

After the 2009 Lok Sabha election results poured in I remember media pundits talking of the maturity of the Indian voters. They ascribed the returning back to power of the UPA to the widespread appreciation that people have for the market-friendly economic policies. Soon after UPA-II was back in saddle, it shifted its focus back to the GDP-centric growth model. Instead of focusing on the human capital, social capital and on natural capital, the ruling party was gung-ho on financial capital and ruthlessly pushed for more market reforms, which in simple words means more privatization.

This resulted in a massive land grab across the country, and also usurping of the natural resources that impacted the livelihoods of millions of people in the rural areas. While rural India witnessed a thousand mutinies every week, with a significant proportion of the people being forcibly displaced from their meager land holding, their only economic security, those who sat on the TV channels mistakenly considered this as a small collateral damage in the path towards development and growth.

The ‘tyranny’ of the markets as Pope Francis now calls it, actually witnessed food, shelter and education going beyond the means of the aam aadmi. While more and more people were being pushed out of agriculture every passing day, growing unemployment and under- employment had pushed the poor to the wall. Rampant mining of resources in Jharkhand, Orissa and Chhatisgarh had made life miserable for the locals. Migrating to the cities, these millions were being systematically uprooted with slums being gradually being demolished. Pushed out of the villages, and then being driven out of the cities, what do you expect these people to do? They can only exercise their vote to express their anger.

While the media pundits went on repeating ad nauseam that a higher growth was necessary for providing more employment and removing poverty, the reality was just the opposite. Between 2005-2009, a Planning Commission sponsored study showed that when the growth was over 8 per cent per annum, more than 140 lakh people were driven out of agriculture; and an additional 53 lakh people had lost their job in the manufacturing sector. In other words, while the GDP was on an upswing, unemployment too was rapidly growing. Studies have shown when GDP was 3 per cent, employment in the organized sector grew at 2 per cent. But when GDP grew at 7 per cent and more, employment fell to 1 per cent. Let’s be therefore clear. India is staring at jobless growth.

The thrust to reduce mounting fiscal deficit to 4.8 per cent of the GDP also had pushed for flawed economic initiatives that hurt the aam aadmi most. Again, pushed for by the media pundits and corporate economists on the TV channels, the emphasis was on doing away with subsidies for the poor. Calling it a wasteful expenditure, these economists had relentlessly campaigned for doing away with subsidies on petrol, diesel, LPG and even on food security. Withdrawal of fuel subsidies had a cascading effect on market prices, which burnt a hole in the pockets. This was completely unwarranted, as I had been saying. The reason is simple. Instead of taxing the poor, the better option would have been to withdraw the tax concessions of Rs 5.73 lakh crore that were given to corporate Indian in the 2013-14 financial budget.  This alone could have wiped out the fiscal deficit thereby enabling the poor to escape the bolt of price hike.

In Madhya Pradesh and Chhatisgarh, what made people vote back the BJP into power was simply because the governments had very systematically launched social security measures that benefitted various sections of the society reducing the killing impact of the market economy. For instance, Chhatisgarh had laid out a very effective and well-maintained food security system that had insulated the bottom of the pyramid from food shocks. Chief Minister Raman Singh had ensured that it worked. In Madhya Pradesh, I must say that Shivraj Singh Chauhan had for some years now seen the writing on the wall and shifted the focus to agriculture. He provided an additional bonus to farmers providing more income into their hands, which in turn catapulted the State to emerge second on the agriculture map of India.

There is more to be done if the BJP has to sustain the momentum. At the same time, let’s be very clear. Following the same flawed growth-centric economic model will not take the BJP far. People have voted for BJP for two reasons: one, they didn’t have any other alternative (except for Delhi) and secondly, the anger is against the unjust economic policies. If the party fails to read the widespread discontent that prevails, visible more through the anger and frustration against corruption and inflation, the aam aadmi now knows there is a political alternative on the horizon. The emergence of AAP clearly shows that the vote is for sensible economics that benefits larger section of the public.

The continuing loot of resources – natural, social and human – in the name of growth must stop. This is the strong underlying message.  People are no longer impressed with high GDP figures anymore. They want food for all, health for all and education for all. 


sanjay mehta said...

AAP holds the future. BJP & Congress are so scared that they simply don't know what to do in delhi.

they don't want re-elections, that is now a too scary scenario. offering to support AAP from outside, makes them look like stupid fools.

Kaushik said...

"The emergence of AAP clearly shows that the vote is for sensible economics that benefits larger section of the public."

I beg to disagree sir. The vote for AAP is as far removed from economics as the Congress is, from clean governance. Though the AAP phenomenon is yet to be fully deconstructed, economics is surely not one of them - unless you include its promise of halving each household's Electricity Bill in Economics.