By Swapan Dasgupta
Congress General Secretary Rahul Gandhi has been
both lauded and berated on many counts. However, even his worst critics will be
wary of charging him with harbouring complex ideas. Going by public utterances,
Rahul political ideas are remarkably uncluttered. First, that young people
should enter politics; secondly, that good people should be in public life;
and, finally, that there are two Indias—the India Shining of the rich and the
poor India with which he identifies.
Rahul’s suggestion of a polarised country may be
faulted in its detail but in the past few months there are indeed two Indias
that have emerged: a political India for whom it is business as usual and a
productive India that is worried silly about an impending crisis. A casual
perusal of the newspaper headlines and the news channels will indicate the
contours of the schism. Political India is preoccupied with the presidential
election, Baba Ramdev’s abusive references to MPs, the never-ending drift in
the BJP and whispers of a Cabinet rejig. The concerns of productive India are
markedly different: the steep decline of the Rupee, the fiscal deficit, a
balance of payments crunch, the retrospective tax, the newly-introduced GAAR
and the steady decline in GDP growth.
India is a big enough country to entertain multiple
and even unconnected concerns. However, it is an index of dysfunctionality when
the political class views the concerns of the wealth-generating classes with
both bewilderment and incomprehension.
For political India, the election season has arrived
very early—at the midway stage of an incumbent government. The ruling Congress
knows that Manmohan Singh will not be in the arena at the time of the next
general election. It knows that Rahul Gandhi will be its projected face. At the
same time, it is worried about a possible fall in its numbers—not merely
because the party failed to take off in Uttar Pradesh but because of the
altered equations in Andhra Pradesh and Tamil Nadu, the two states that
contributed decisively to the UPA’s success in 2009. Hence the search for a
magic wand that will transform a looming defeat into a famous victory.
The search for a winning formula has taken the
Congress in predictable directions. Populism, it knows, is potentially
rewarding. With the MNREGA running out of steam, it has found the answer in a
proposed Food Security Act. Unfortunately, that scheme is hideously expensive
and there is not enough money in the exchequer. Hence the quest for more
revenues that will achieve three contradictory goals: keep the fiscal deficit
down, maintain fuel subsidies at near-existing levels and pay for big ticket entitlement
schemes.
The economist in the Prime Minister knows that it
will take a stupendous acceleration of the GDP growth to meet all three
objectives. At present, the Government lacks the requisite political elbow room
to both increase revenue and curtail expenditure. So what does it do? Bereft of
choices, the Government has reverted to the old-style tax-and-spend which was
the hallmark of pre-1991 dispensations. The result: a systematic assault on
productive India just when it is coming into its own.
Both India’s are confronted with a crisis.
Productive India has witnessed its hopes of a reformist dispensation come
crashing. It is now struggling to keep afloat, desperately clutching at straws
and hoping against all hope that the stalemate gets resolved through an
election. Those who had hoped for a better life are modifying expectations.
Political India has its heart committed to fiscal
profligacy. Yet it is hamstrung by an inability to move in any direction. The
Prime Minister may want to cut fuel subsidies and be responsive to the demands
of global finance. But he is constantly checkmated by those who have never
fully grasped the dynamics of a liberalised, deregulated economy. Yet, the
populists too can’t get their way because there just isn’t enough money to pay
for paternalism.
Sunday Times of India, May 6, 2012
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