The Hindu Business Line : Populism versus responsibility

With the Railways Minister planning a populist Rail Budget, the divestment agenda hamstrung by the Left and power sops being doled out to farmers and domestic consumers in some States, it is clear that more than a fiscal sleight of hand will be required to materialise the goodies the UPA is promising.

THE histrionics of government formation and interpretation of the body language of the newly elected MPs as they took their oath in the Lok Sabha last week — such as Mr Mani Shanker Aiyar touching Mr Atal Bihari Vajpayee's feet or Ms Maneka Gandhi and Ms Sonia Gandhi not even exchanging a glance when the latter walked up to take oath — are behind us. And the people of India, who delivered an astonishingly different verdict from what they were expected to, are looking to the government to get on with the task of governance, hopefully good.

But this is easier said than done, especially with the mandate being interpreted, more by the Congress(I)'s allies in the United Progressive Alliance as one for populist measures.

True, the country's one billion plus people need economic reforms with a human face. What is this `human face'? One can interpret it as an empathy, an understanding of the pain and anguish of the illiterate, the deprived and the devastated, and a genuine effort to help those who do not have the means or the opportunity to compete with others more fortunate. It could also be a gentle yet firm touch that would perform the much required healing for the marginalised sections of society, including the deprived segments of the religious minorities, tribals, Dalits and even women.

This, indeed, is the sobering lesson from the election verdict — not only for the leaders in the NDA, who had taken their return to power as a mere formality, but also for the more privileged citizens, who had indeed reaped some benefits from the BJP's `India Shining' story.

So far, both the original reformer, the Prime Minister, Dr Manmohan Singh, and his Finance Minister, Dr P. Chidambaram, have said the right things about pursuing economic reforms in such a way that the fruits reach all — the distressed farmer, the unemployed youth and the starving villager in India's most backward regions.

The President's address to the joint session of Parliament also reflected this, as it sought to soothe the frayed nerves on Dalal Street by reiterating that India is a safe investment bet, as much for the FIs and small investors as for the foreign investor.

Based on the Common Minimum Programme, it talked of reaching the much-required credit to the small and marginal farmer and of spending adequate amounts on basic education and health-care. So far so good.

But not so much when the Congress(I)'s allies, such as the Rashtriya Janata Party chief and Railway Minister, Mr Lalu Prasad Yadav, talks of a populist Railway Budget, and the CPI(M) leader Mr Sitaram Yechuri sits with airport employees in a dharna against the privatisation of major airports.

Mr Lalu Yadav, it is reported, wants to reduce not only second-class fares, but also the freight rates for transporting foodgrains and coal. He wants to make up for this shortfall by raising the already high upper class fares. The gradual stepping up of the number of AC coaches in long-distance trains is an indication of their growing popularity. A significant majority may groan a little to dish out the substantial amount required to travel AC, but they do it nevertheless to avoid the discomfort of heat, dust and grime, not to mention the din, of second-class travel.

If we want our airports to be brought on a par with Changi, Heathrow or Schipol, there certainly is a case for improving the services on our trains and making the coaches not only more clean and comfortable, but also swank enough to come within a respectable distance of the trains that run through Europe or Japan.

The Prime Minister wants the 21st century to be India's. It cannot become that without a considerable lift and improvement in infrastructure, communication and transport facilities. And such improvement cannot happen by bleeding institutions such as the Railways — all for the sake of a few more seats in the next Assembly elections in Bihar.

Returning to Mr Lalu Yadav, reduction in passenger fares is not the only largesse he wishes to offer. He wants to also lift the freeze on Railway recruitment, obviously in a bid to be seen as a guardian angel for the unemployed youth of Bihar and the rest of India.

After all, the Railways is a huge organisation and if it cannot provide more jobs to mitigate the suffering of the unprivileged and the oppressed, what is the use of having such a public sector utility, is his obvious question. Can we please have some original ideas on generating more self-employment through innovative financing and training schemes?

There are certainly other colleagues of Mr Lalu Yadav who are also itching to give away goodies — be it free power to farmers or reservation of jobs in the private sector. This, our politicians have decided, is the only way to get votes and return to power.

So, in Tamil Nadu, the AIADMK supremo, Ms Jayalaithaa, whose party was trounced so badly in the polls that this Lok Sabha does not have a single AIADMK MP, went on a roll-back spree. From reduction in power tariff and parking fees for vehicles, the Tamil Nadu Government has done a volte face on several of its earlier decisions, some of which were fiscally prudent. So sweeping have been the measures that, in one stroke, the charges against the government servants who had gone strike and cases against the media have been withdrawn. Says an AIADMK leader: "Amma is very clear on one thing. This is what the people want; so let us give it to them."

If Mr Lalu Yadav has his eye on the Bihar Assembly elections due early next year, naturally Ms Jayalalithaa is preparing the ground for the 2006 Tamil Nadu Assembly polls. But if each politician starts giving away goodies demanded by the people, where will it leave the exchequer?

Successive governments in Tamil Nadu have been claiming that the exchequer had been emptied by the previous regime. The DMK would, of course, like to believe that the incumbent government in the hope of returning to power in the State in 2006 is emptying the Tamil Nadu exchequer. As for the goodies basket, trade unions are demanding that interest on PF contributions should be raised to 12 per cent. This may be music to any salaried person's ears, but is there any possible way in which this can be done without committing fiscal suicide?

With the Budget barely a month away and different sections already telling the FM that they and their earnings should not be taxed any further, where is the money for all the freebies and goodies going to come from?

It is a great feeling to be Santa Claus but those entrusted with the country's fortunes have to use funds with responsibility. They can only give with one hand what they take away with the other. Simple arithmetic does not allow them to give away with both hands.

Of course, the solution is to `cut down on government spending, manage your resources better, and stop siphoning off funds through corruption'. But this is easier said than done.

Mr Chidambaram spoke about continuing the economic reforms that the Congress(I) regime of 1991 had begun. Though politically correct, it cannot be denied that India's position in the global fraternity is where it is today thanks to the reforms launched in 1991, and carried forward by successive governments, including the NDA.

Both Dr Singh and Mr Chidambaram are aware of the foolishness of tinkering with prudent economic policies, some of which might even be the BJP's contribution, just for the sake of populism.

But given the nature of their coalition, at the moment they can only play with words — pitching divestment against privatisation, and so on. As the former Disinvestment Minister, Mr Arun Shourie, pointed out the other day, the UPA government is not doing anything greatly different from what his ministry did. "We never said we were going to privatise ONGC, GAIL or IOC; they are saying the same thing," he said earnestly.

Well, were he a dyed-in-the-wool politician like Lalu Yadav or Mulayam Singh Yadav, he would know politics is the art of saying something but doing something else.

(Response may be sent to rasheeda@thehindu.co.in)