The Hindu Business Line : Political realities and double speak

What drives political parties to speak in two voices when it comes to execution of hard economic decisions and what implication does it have in implementing such decisions?

WHEN some of the allies of the Congress party at the Centre, particularly the Dravida Munnetra Kazhagam in Tamil Nadu and the Left parties, held agitations against the UPA (United Progressive Alliance) Government's recent decision to hike the prices of petroleum products, the Opposition parties accused them of adopting "double standards" on the issue as they were opposing the hike despite being a party to the decision.

Similar sentiments were expressed in many quarters when the Left demanded the removal of the representatives belonging to the very same organisations whose services they have sought to develop West Bengal economy from the consultative panels of the Planning Commission.

Indeed, all major political parties in India follow double standards when it comes to implementing hard economic decisions. Examples are plenty, but some are suffice to prove the point.

The Congress, which termed the reform-oriented economic policies of the previous NDA government as "anti-people" during the run up to the 2004 general elections, is now playing the reforms card. The UPA Government's fervour for more reforms has been characterised as "anti-poor, anti-poor and anti-rural" by some of its own constituents. On its part, the BJP, which championed the cause of Swadeshi economic policies when it was in opposition, turned absolutely Videshi with its penchant for reforms under the NDA regime. Significantly, the party through its flashy `India Shining' campaign did the best to capitalise on the reform-led economic growth achieved under the NDA rule for electoral victory.

At the State level also, one can hear of "double speak" by regional parties. For instance, in Andhra Pradesh, Dr Y.S. Rajasekhara Reddy, who stormed into power using anti-reform rhetoric, is now suggesting that his government is "not against taking some administratively harsh economic decisions" when it comes to economic reforms. For example, he recently decided to disconnect the power supply to 3.5 lakh unauthorised agriculture borewells. Clearly, this will not match his announcement of free power supply to farmers.

What drives political parties to speak in two voices when it comes to execution of hard economic decisions and what implication does it have in implementing such decisions? Take the opposition to a particular economic cause first.

The general perception is that parties in India are highly "opportunistic" and have developed the "culture" of opposing those economic policies of the incumbent, which inflict a burden on the citizens just for the sake of opposition. This is an oversimplified way of viewing the problem.

As rational political beings, the Opposition parties do not make an issue out of a situation unless they are pretty sure that by doing so they gain political mileage. By the same token, they keep a low profile on an issue that favours the ruling party. For instance, the Opposition raised a hue and cry when the government hiked petroleum prices in the first week of November but when the price of petrol was cut down two weeks after, a virtual silence was the response from the Opposition. Hence, for the Opposition, an event might not be worthy unless it helps them to fetch votes.

Now the moot question is: In what way will the opposition benefit by opposing a hard economic decision taken by an incumbent? The plain truth is that any hard economic policy measure, say a hike in the user charges on services provided by the government, involves some inconvenience to citizens.

However, in the long run, it would benefit the economy as the dividends of such a measure start materialising rather late. This is particularly true in a country like India where the economy had been functioning in an environment of government support/control and inward looking policies for about four decades. A shift to cost-based user charges has the long-term benefits of improving the finances of the government, eliminating or reducing the losses of public enterprises and supplying citizens with quality public services. Some initial hardships may be inevitable before the benefits of such measures are realised.

The intention of the Opposition in resenting such measures then clearly is to cash in on public dislike of the initial pain associated with such measures for their electoral gains. An interesting question here is why a party which makes so much noise over hard economic decisions if an incumbent attempts to take such decisions when it is in power? The answer lies in the new development paradigm of liberalisation-cum-globalisation and the burden of being in power. After the fall of Socialism, market-driven and outward-looking economic strategies have become the credible alternatives before the world for achieving economic growth. And hard economic decisions such strategies demand on the part of the incumbents are inevitable.

As most nations started embracing such strategies for their economic prosperity it became difficult for any single nation to shrug off the same, as this would deny it the benefits of being integrated to the world. Under such circumstances, for the party in power, adoption of reform oriented economic policies is essential because the lack of or little reforms would result in losing the benefits of reforms to their counter parts in other countries/regions. Thus, for the national government it implies loosing out to other countries.

For example: India facing threat from a new-look China. For the sub-national governments, such as States, it implies loosing the race to other States. Take for instance, a State, say, Uttar Pradesh, loosing private investments to a reform-oriented State like Andhra Pradesh.

Situations like this have the potential to damage the electoral fortunes of the ruling party because, as elected leaders, they are responsible for the economic development of the country/region they rule. Any deviation from such policies would have adverse effects on the economy. The fact that such policies involve hard economic measures would not deter the incumbent from pursuing such measures because of the economic and political necessity they face.

A classic example is the lack of response shown by the State governments to the plea of the Petroleum and Natural Gas Minister, Mr Mani Shankar Aiyar to scale down the State sales tax rates on petroleum products so as to reduce the burden on the people.

What damage do double standards cause to the execution of hard economic decisions?

The incumbent would find it exigent or impossible to go ahead with such decisions, particularly those having significant short-term economic hardships, fearing diatribe from the opposition and the resulting political backlash. However, the irony is that both the sides are appreciative of such measures when they are in power but when in opposition they resist each other's move.

A somewhat pessimistic view could be that agreeing to the incumbent's policies by the opposition paves the way for their smooth implementation, which might win electoral favour for the incumbent.

To overcome this policy dilemma, either the opposition should cooperate with the ruling party in implementing hard economic measures by foregoing the short-term electoral dividends they might reap by opposing such measures or the ruling party should implement the measures by pooh-poohing the hue and cry raised by the opposition and by overcoming the initial hardships so as to effect tangible improvement in the welfare of the citizens.

Considering the maturity of the political parties in India, the first option is the least one could expect. Moreover, the opposition has no incentive to cooperate with the ruling party unless they are benevolent enough to forgo the short-term electoral dividends they gain by opposing the hard economic measures. This leaves us with the second option.

The problem here is that the ruling party will have to face the negative campaigning on the part of the opposition and the resultant political backlash thereby undermining its political will to going ahead with hard economic decisions. This takes us to the question of incentivising the process of implementing hard economic measures for both sides of the political spectrum and here lies the real puzzle.

(The author is a faculty member with Research and Publications, ICFAI Business School, Chennai. The views are personal.)

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