Friday, 28 February 2020

Petrifying Populism

Updated: January 25, 2014 12:08 pm

When gale clouds are again hovering in the horizon over the Indian economy, the political leadership in New Delhi seemingly has fallen to populism to woo voters ahead of coming general elections, due by April-May this year. The freebies, showered by the government, entrenched in subtle policy moves, will further strain government finances that are already stretched, will risk another explosion in the fiscal deficit, will lengthen an economic slowdown, and will dent corporate earnings over a longer period. I do not know how the word populism originated, but intense observers of the discourse on India‘s political economy know that populism has made an interesting odyssey in our country. From being despised as bad economics to the advent of liberalisation in the early 1990s by a section of the intelligentsia that had applauded the doctrine “West is Best”, it has now been honourably enshrined as an essential part of good politics by mainstream political parties. And its latest proponent is Arvind Kejriwal ‘s AAP. Its politics is driven by its dominant populist impulses. Although AAP ‘s giveaways in terms of water and power subsidies have come in for sharp criticism, with experts stating that it would drain fiscal resources. So, to what extent will AAP take refuge under populist measures as most of the surveys related to poverty counts in this country go awry as they deflect from their objectives? The methods adopted for surveys do not, in most of the cases, contain common parameters, which result in different definitions of poverty, hence no ground reference. According to a survey of 881 slums, the NSSO has inferred that about 8.8 million households are in slums. This picture differs hugely from Census 2011 figures, which estimates that 13.9 million households are in slums. And what led to the confusion is this report, in which, three years ago, the Ministry of Housing and Urban Poverty Alleviation (MHUPA), after reviewing various estimates, inferred that the population living in slums would reach about 93 million (19.8 million households) by 2011. So, which among the three is an accurate assessment? The improper estimation leads to collection of wrong data and information, and ultimately it leads to the making of wrong policies and their wrong implementation, as a result, there is always dilemma in delivering services and basic facilities to the grassroots levels. Such kind of policies, based on these data, create social threats as well as more harms to the society. Hence, there should be a system, which can have the maximum accuracy in maintaining such records so that we can develop more accurate and more exact policies to the people of the nation—not freebies.

Now I come to the Congress, which, having been smashed in the recent state elections, may try to recover ground before the general elections by announcing more freebies. The party may advocate for new populist giveaways such as free medicines, farm loan waiver, free pilgrimages for people of all religions, etc. There will, of course, be fiscal consequences. But the fixers in the party can fiddle with the budget figures to hide the real impact. But a populist spree does not bring in expected votes, as was witnessed in the case of Ashok Gehlot, the Congress Chief Minister of Rajasthan, who went on a populist spree in Rajasthan, yet lost resoundingly. I think elections in Delhi and Rajasthan have proved that gone are the days when people used to vote for the Congress party, despite it being giving all sort of freebies to people. We observed that the Congress came out with schemes telling all of us that these are game-changers, but where is the Congress today? So, I tend to agree with the statement that the Congress should ditch desperate populism before 2014 elections. For, over the past ten years, the UPA has spent approximately thousands of crores on diesel, petrol, LPG, kerosene subsidy. Instead, if it had spent this money on oil exploration, we would have been self-sufficient in oil and the rupee would have been trading at Rs40 to the dollar. Then people would have also felt more secured. Why does this common-sense approach not come near the mind of our PM, who is PhD from Oxford University? There are no free lunches and the haemorrhaging of public finances on giveaways at the expense of curtailed spending on productive sectors such as infrastructure would set the country back by decades in its march towards progress. What worries me is the fact that the wrong sorts of policies get pushed through in the run-up to the elections, and by that, I mean a sort of populist policies that could ultimately prove detrimental to a long-term economic growth and put greater pressure on the government ‘s balance sheet. Against this backdrop, I pray may the saner senses prevail in the country.

Deepak Kumar Rath

Deepak Kumar Rath

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