Tuesday, August 16th, 2022 16:38:30

Populist Charms

Updated: March 31, 2012 1:06 pm

As I write this column, one does not know who India’s Railway Minister is. This is for the first time in independent India’s history that a minister is sacked (or asked to leave) the day he presents the budget of his ministry in the Parliament. The budget is not necessarily his, but that of the Government of India as a whole as represented by the council of ministers headed by the Prime Minister. In other words, the budget proposals must have been cleared by the Prime Minister before being presented in the Parliament. In that sense, if Dinesh Trivedi is about to lose his office, it is not because of the fact that he does not have the confidence or pleasure of the Prime Minister. On the contrary, the fact of the matter is that he has lost the confidence of his real appointer, the Trinamul Congress supremo and the Chief Minister of West Bengal Mamta Banerjee. The Prime Minister is helpless as his United Progressive Alliance government has been such a coalition government in which Trinamul Congress is an important constituent that as has been the case with his other allies, it is the Trinamul Congress chief who decides who will be the Central ministers from her party.

Of course, unlike his counterparts elsewhere in the world, Manmohan Singh does not have any prerogative whatsoever in choosing his ministerial colleagues, including those from his own Congress party. The Congress ministers owe their allegiance to the party’s unquestionable leader Sonia Gandhi, not to the Prime Minister, something that never happened to any other Congress Prime Minister in the past. In fact, I had highlighted recently in this column how one of the most important features of the Manmohan Singh regime has been the total lack of collective responsibility of the ministers. Besides, elsewhere in this issue of the magazine, it has been highlighted how the present UPA regime is beset with serious challenges and is rapidly losing its credibility.

Therefore, let me concentrate on the implications of the issue that has made Trivedi unwanted within his own party. His “crime” has been the proposal in the railways’ budget to raise the passenger fares after eight years. Given the precarious financial health of the railways at the moment, hapless Trivedi was perhaps right in augmenting the revenue of the ministry. But then that was not acceptable to his leader in Kolkata. Hence, we have a peculiar situation where the budget has been presented and the Prime Minister has praised it publicly, but the same Prime Minister has now agreed “to roll back the far-hikes” and “appoint a new Railway Minister.”

Mamta says that common men cannot carry on the burden of paying more for their travels in the train. After all, populism has been her political ideology for years, the same way it has been the benchmark for Sonia Gandhi and her jhollawallah advisors. Advocates of this ideology say that they are committed to supporting the rights and powers of the common people in their struggle with the privileged elite. And as has been seen all over the world, the populist politics is not the rational politics. It is terribly one-sided in the sense that populists are only obsessed with the distribution side of the story, being totally oblivious of the growth side of the story. They do not bother about the fundamental fact that one needs to generate wealth or income so as to be able to distribute. For them, particularly those who are politicians, what is important is that populism yields results in short-term; it brings them votes.

After all, populism benefited immensely the then struggling Prime Minister Indira Gandhi in 1969. Her “garibi hatao” slogan and penchant for legislating government control over economic activities and agents resulted in the nationalisation of banks and insurance, the Monopolies and Restrictive Trade Practices Act that curbed expansion of large firms, and the Foreign Exchange Regulation Act that deified the false god of foreign exchange scarcity and created a stifling edifice of forex and import controls. All this stunted our economic growth, discouraged innovation and competitiveness and promoted the lack of transparency in our economic activities, resulting in tax-evasions and the black economy. It is the same populist politics that explains why even the non-Congress governments under VP Singh, Deve Gowda and IK Gujral gave the country huge write-offs of rural credits and the massive Mandalite expansion of reservations in public sector jobs and educational facilities, thereby seriously weakening meritocratic principles in the functioning of education and administration.

Of course, in between some corrective steps were taken by Rajiv Gandhi and then Narasimha Rao in the direction of pragmatic economic policies. The Vajpayee regime was also committed to the liberalisation of economy. But things took a reverse turn with the coming of the UPA in 2004. The much talked about Rural Employment Guarantee Act has proved to be horribly expensive, having little meaningful impact on rural employment and poverty. But, it is being justified as the most important reason why the UPA retained power in 2009; because it is supposed to have provided a gravy train of political patronage for the Congress party. The same rationale also is behind the forthcoming exercise to put Sonia Gandhi’s next pet theme, the proposed Food Security Act, into shape.

As has been noted, populist policies often fetch votes. And that is perhaps due to the fact that when a country under prolonged regime of what is said “license-permit-raj” opts for liberalisation, people undergo initial difficulties. Economists describe this syndrome as “the J-Curve”, or “Phillips Curve” According to this model, after reforms, economic welfare of the state goes down and the country enters the “Valley of Sacrifice”. But then, the government is willing to enter this valley because it realises that after a certain time, the reforms are going to pay off and the people as a whole will be better off. So, it is a matter of time for the economy to get out of the valley and starts climbing the mountain.

In simple terms, in stead of providing temporary relief at the individual level (such as providing subsidies in various forms) as under populist policies with long-run negative consequences, the J-Curve implies that the government thinks in collective terms with policies that will create an empowering environment in which people will augment their economic capabilities so that they will be in a position of not requiring anybody’s or government’s mercy. This requires creating more infrastructures and assets so that people develop capacities to earn and create wealth.

Therefore, what the likes of Sonia Gandhi and Mamta Banerjee should realise is that rather than promising to provide increased subsidies it makes much better electoral sense to promise vital connecting roads, water supply, sewerage facilities, agriculture storage and marketing facilities, community halls and libraries, school and hospital buildings, and check-dams and irrigation channels. Community assets and infrastructure, unlike individual benefits, are public goods, appreciated by everybody in more or less equal measure. For example, everyone rich or poor benefits from a new road, a new school, a new tank or a small power station. This improves the productivity and living standards of local residents, encouraging further investment, providing jobs and expanding economic and commercial opportunities. This is something Gujarat Chief Minister Narendra Modi is doing successfully, notwithstanding the allegations of communal charges surrounding him.

Results of the recent assembly elections have further convinced me that beyond a point, populist slogans do not impress the Indian voters any more. The performance of the Sonia-led Congress has been really pathetic despite the UPA government stalling economic reforms, such as the new land acquisition and foreign investment rules, providing further subsidies on food and fuel, promising communal reservations and discouraging foreign investments. But then old habits die hard. Majority of India’s politicians will continue to be beholden to the charms of populist charms in foreseeable future. That no doubt is a tragedy.

Let me conclude by quoting Leo Strauss, a political philosopher and classicist who specialised in classical political philosophy: “Thus the question arises of what is the best regime. The first answer given by such men as Plato and Aristotle, and Socrates before them, is that in which the wise rule, absolutely and irresponsibly. Irresponsibly in the sense that they are not responsible to other human beings. That the wise should be responsible to the unwise seems to be against nature. But this regime is not possible as both Plato and Aristotle knew. The few wise are too weak in body to force the many unwise, and they cannot persuade the many unwise sufficiently. Wisdom must be qualified by consent, it must be diluted by consent, i.e. by consent of the unwise. The political implies, in other words, something like a right of un-wisdom, a right of folly. This is the paradox of the political, that such a right of un-wisdom is admitted.”

By Prakash Nanda

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