Political Diary

New Delhi, 31 August 2013

It’s Raining Populism

SONIA DIKTAT: YEH KARNAI HAI!

By Poonam I Kaushish

A heated argument took place on the Food Security Bill at the Union Cabinet meet last week. “Where do we get an additional Rs 5000 crore?” reportedly queried Finance Minister Chidambaram. Colleagues Antony, Sharad Pawar and Anand Sharma supported him but Kamal Nath, Ghulam Nabi Azad and Jairam Ramesh disagreed. All eyes turned to Prime Minister Manmohan Singh. Said he, “Bite the bullet.” It was eminence grise’s (power behind the throne) ‘baby’.

Five days later averred outgoing Reserve Bank Governor Subbarao: “I do hope Chidambaram will one day say, 'I am often frustrated by the Reserve Bank, so frustrated that I want to go for a walk, even if I have to walk alone. But thank God, the Reserve Bank exists.” His response to Finance Minister’s statement, “If the Government has to walk alone to face the challenge of growth, then we will walk alone,” underscoring the two did not see eye to eye.

Cut to the Rajya Sabha where a slugfest ensued between the Prime Minister and BJP Friday last. Breaking his maunvrat on the economic crisis Manmohan Singh blamed the “foreign hand”, domestic factors and Opposition for not allowing Parliament to function. “In which democracy does an Opposition call the PM Chor hai”? Shot back Opposition leader Arun Jaitley, “In which democracy does a PM buy MPs to win on a vote of confidence.” Accentuating the wide chasm.

Should one dismiss these as disparaging voices from Government? Settling political scores to garner vote-bank security in forthcoming polls? Or do they portray the reality of India? A sharp downslide from a global darling to plowing a lonely furrow? Is the India story over? All this and more.

Undeniably the Congress’s ma-beta duo Sonia-Rahul did the unthinkable: pluming for populism over prudence by getting Parliament to seal the Food Security Bill and Land Bill last Monday. Terming the FSB a “game-changer” asserted Sonia, “The question whether resources can be mustered is answered by, “Ye karna hi hai. 

Clearly, sound economic sense has been surrendered to political gamesmanship on the assumption that populist freebies yield better electoral rewards than reasoned issues and sustainable programmes. Think. The FSB which promises to provide 67% population 5Kg wheat, rice and coarse cereals at Rs 3, 2 and 1 respectively will cost the exchequer Rs 1.25-30 lakh crore.

Where will the Government generate the money? The fiscal deficit is 5.6%, growth rate down to 4 %. The current account deficit is US$ 87.8 billion (4.8%) i.e. our imports outstrip exports. The Government has no idea or control on skyrocketing prices, high inflation, stagnant economy, rapid depreciation of rupee, stymied by policy paralysis, a cataclysm staring us in the face. 

Undeniably, the FSB is a sure prescription for the impending collapse of Government finances without ensuring that grain would be available to it at affordable rates. Probably, the Administration will buy foodgrains at high prices and sell at the lowest resulting in enormous unwanted expenditure.

True, the poor who constitute the largest vote chunk need to be feed and it is the duty of the State to take care of its peoples’ welfare but at what cost? Or will we wait for manna to fall from Heaven? Can a Party get credit at public expense? 

Arguably, the scheme will not entitle beneficiaries to adequate calorie intake, and promote malnutrition. Where will the aam aadmi get nutritional and fortified food, his protein, the Bill makes no provision for dal or will the Congress give chicken soup, reminiscent of French Queen Marie Antoinette?

Also, the Bill could cripple agriculture as farmers would lose incentive to raise food crop. Already, 2,500 farmers are giving up cultivation every year which would lead to foodgrains becoming scarcer whereby one would need to buy more. Thus the number of hungry people would increase. Are we putting the clock back to the populist nineties?

Why blame Sonia? Populism is not a new phenomenon.  It has reared its ugly head in various forms over the last 25 years. A ring-a-ring-roses of political one-upmanship heralded by slogans. From Indira Gandhi’s ‘Garibi Hatao’ to BJP’s Kamandal and V.P. Singh’s Mandal issues down “roti, kaprah aur maken” to ‘sadak, bijli aur paani’ and now ‘bhook metao.’

Notably, the Congress President is doing a NT Rama Rao. Remember how Andhra’s TDP supremo successfully appropriate rice at Rs 2 and made it into a symbol of victory in the early nineties. Why blame Sonia alone? In BJP ruled Chhattisgarh Raman Singh too has made rice his political staple. He has now upped his rice bonanza from Rs 3 per kg to Rs one for the BPL families. All phokut mein. 

Sadly, the populism political parties indulge in would be funny, were it not for future consequences.  None sees the danger of economic derailment.  Specially, when recession and a severe financial crisis is staring the country in the face. Given the economic logic that there is no such thing as a free lunch, a politician’s indulgence is invariably paid for either in the form of higher taxes or increasing inflation. 

Of course, it can be argued that Parties are obliged to be seen as populist.  It would be foolish to wish away political intervention or interference.  “We have to garner votes and they don’t come for free,” confessed a senior Minister. Rubbishing all talk of political jurisprudence in the economic sphere crossing prudence limits, where it starts hurting the economic. 

Unfortunately, our policy makers have not been able to perceive the reality of the situation and made populist spending in to holy cow without studying its effectiveness. Miserably failing to evolve a strategy of development which could take into account our pluralism and fluctuating economic disparity. 

For instance, widespread poverty is a good reason for rationing foodgrains through the PDS. But has anyone studied whether it has benefited the Below Poverty Line masses?  No, on the other hand, the actual impact working through a multiplier effect has only pushed up corruption, filling political and bureaucratic coffers. While the poor fed their hungry stomachs on the neon signs of Dominos pizzas.

Arguably if the Government recognises that its schemes are leaky is it not irresponsible to continue spending through old, inefficient channels? No proper audit has been done on how the money is being spent. Remember how Prime Minister Manmohan Singh rued that the Rs 12,000 crore meant for poverty alleviation just disappeared.

Questionably, populism will only provide immediate succour at the expense of the entire future. It is no remedy for neglect of education, health, faulty priorities in respect of industrialisation and under-investment in rural areas. The growth of corruption, bloated bureaucracy, burgeoning population and apathy to greater productivity. 

Time now for Parties to realise that good governance and populism do not go hand in hand.  The voter is no fool.  Each populist slogan only heightens his growing awareness. The real significance of any electoral battle is that unless poverty is tackled, populist gimmickry will continue to entice our netas.  No Government can afford to throw away money on populist whims. India needs a ‘lakshman rekha’ on vote-bank politics. --- INFA                      

(Copyright, India News and Feature Alliance)