The Hindu Business Line : Budget: Another political statement?

The UPA Government is going the way of Nehru in 1951 and Indira Gandhi in the 1960s. Dangling carrots is the name of the game. The government makes promises; there is no evaluation system, which puts the blame for inadequate performance at the door of the guilty parties. If Nehru and Indira Gandhi failed, why should one think that Ms Sonia Gandhi will be able to do better, asks Sharad Joshi.

THE Budget speech by the Finance Minister, Mr P. Chidambaram, made many people happy. A few, however, grumbled about the fringe benefit tax and the cash withdrawal tax. But these are only minor points on which the Minister can afford a roll-back. In fact, they were probably introduced as a diversionary tactic. The major policy announcements lie where they are least likely to provoke any opposition. These are: A whole list of munificent allocations, particularly in favour of the disadvantaged sections, including the Scheduled Castes, the Scheduled Tribes, the minority community and, to some extent, the weaker sections of Bharat.

This spate of compassion and activism, of course, has its origins in the rhetorical tradition of the Congress party itself. In the Nehruvian epoch, of the immediate post-Independence era, the party brushed aside Gandhiji's ideals and economics and promised an era of modernity and prosperity on the lines of the erstwhile USSR. It flopped. Indira Gandhi held out a more practical promise of eradicating poverty. That did not work either. Had the nation tried the Gandhian approach, even if it had flopped it would not have created the kind of massive dissatisfaction that the failure of the Nehruvian model did.

The Nehruvian misadventure vetted appetites that it could not satisfy. That gave rise to a large number of social and political movements that cried out for justice for the various disadvantaged sections. These included the traditional Marxist-Leftists of various hues and colours, and the numerous casteist outfits that used the Marxist jargon, with the difference that they emphasised the caste contradictions, rather than those that Marx highlighted.

The Leftists lost the race, and were confined to a few pockets and issues such as environmentalism, anti-globalisation, anti-MNCism and protectionism. The caste-based politics received a big push with the then Prime Minister, Mr V. P. Singh, accepting the recommendations of the Mandal Commission. That made creation of employment and reservations in jobs on the basis of caste far more important than economic growth. The casteist outfits easily outdid the traditional Left in gathering mass support.

The National Democratic Alliance (NDA) made a brave attempt to create a political alternative on the basis of the consolidation of the majority community rather than economic and historic contradictions, but failed. The Congress won in the 2004 elections but could not muster the required majority without forming an alliance with the Left and the casteist forces. But surely the party is looking to come to power on its own steam. Thus the second, and perhaps the real, Budget of the Congress-led Government makes a determined effort to wean away the support of the weaker sections and the minority community to weaken the Leftists and the casteist allies in the United Progressive Alliance (UPA). This not so-secret design explains the dubious claims about having over-fulfilled the targets in respect of supply of credit to farmers and food-for-work programme and the apologia for having dragged its feet on rural employment guarantee Bill. But for the coming fiscal and beyond, there is a long list of alluring projects.

The reinforcement of Antyodaya Anna Yojana, the mid-day meal scheme, Sarva Shiksha Abhiyan, Rajeev Gandhi mission for drinking water and sanitation, separate budgetary chapters for the development of the Scheduled Caste and the Scheduled Tribes and the separate Budget for women, special educational and social schemes for the minority community, creation of a backwards region fund and, last but not the least, the Bharat Nirman. The long-term purpose of the schemes is to alienate the disaffected sections from the allies in the UPA so that the next time around, the Congress would be able to win the seats they had lost to their allies. This was urgently required because of the fast-approaching elections in West Bengal and Kerala where the Congress would be pitted against its Leftist allies and it has to win not only votes but also hearts.

There is yet another design behind this Budget that is far more significant. The Congress ushered in the Nehruvian socialistic pattern of society. It was again the Congress that admitted to the failure of the misadventure and launched the economic reforms and the move towards liberalisation. It was again the first to realise the political risk involved in an endeavour that emphasised individual initiative and enterprise rather than governmental patronage.

The former Prime Minister, P. V. Narasimha Rao, who initiated the economic reforms had started having doubts about the whole enterprise and talked of a "middle path". At the Congress conclave at Ramtek, the party started a shift towards a more welfare regime. The NDA ended up with the same dilemma. It realised the long-term advantages and the inevitability of liberalisation and managed to restrain the swadeshi and the Hindutva forces within its ranks to push ahead economic reforms. That produced growth but also the electoral disapproval. The Congress(I) and the UPA are unwilling to take that kind of risk and are trying to evolve a pragmatic mix of reforms and the so-called human face. The Prime Minister, Dr Manmohan Singh, tied to the Leftists to run in a three-legged race, had to re-strategise. What is the new strategy?

The first element of the new strategy is the "management of the Left" so that the roll-back is not construed as a victory for the anti-reformists. The Budget performance reveals many tale-tell signs of this.

The soft-pedalling of the question of foreign direct investment by not referring to any specific percentages;

The ignoring of the high-pitch demands of the Left for imposing an income-tax on agriculture as also for a second bout of land reforms.

The shelving of the proposal for a review of labour laws that was hinted at in the Economic Survey, to soften the blow.

The conceding of the wishes of the Left in respect of interest rates on Provident Fund.

The UPA has also made up its mind to make the government a more active instrument of development. The political leadership and the bureaucracy are not happy playing the role of a mere animator or an enhancer, there are several phrases in the Budget speech that emphasise the leaning towards decisive intervention by the State in favour of the poor. The Finance Minister referred to Dr Amartya Sen, the Noble laureate, as also to Saint Tiruvalluvar to lend the support to his new policy line.

The implications are very clear. Dr Amartya Sen does not question the overall validity of Arrow's Theorem that collective decisions are a priori irrational. He, however, argues that an exception ought to be made in favour of people suffering from dire poverty, malnourishment, unemployment and social discrimination.

He advocates effective organised action against these curses of humanity. This argument comes in handy for communities that lack the enterprise and the determination to make a plunge towards freedom and liberalisation. The real question is: Is not effective collective action a contradiction in terms?

The UPA Government is going the way of Nehru in 1951 and Indira Gandhi in the 1960s. Dangling carrots is the name of the game. The government makes promises, very clear in its mind that it will never be called to answer for them.

There is no evaluation system, which puts the blame for inadequate performance or even abysmal failure squarely at the door of the guilty parties. If Nehru and Indira Gandhi failed, why should one think that Ms Sonia Gandhi will be able to do better?

What one should ask the Finance Minister, the Prime Minister and the Planning Commission is for minimum failure standards. It is all right to say one crore hectares will be brought under irrigation or that 60 lakh additional houses will be constructed for the poor.

But, simultaneously, there should be an undertaking that if less than 50 lakh hectares are brought under irrigation, failure will be accepted. Similarly, if the number of houses constructed is less than 30 lakh, no attempt will be made to protect the guilty parties.

Once again, the Government is assuming an activist role in the place of an animator or enhancer. This will soon result in a new avatar of the licence-permit-quota Raj, and enhance corruption as also desperation.

The President, Mr A. P. J. Abdul Kalam, in his address before Parliament, maintained that freedom was development. The Finance Minister is countermanding him by giving the government a role restrictive of individual freedom and enterprise.

(The author, founder of Shetkari Sanghatana, is Rajya Sabha MP. He can be reached at sharadj@pn2.vsnl.net.in)

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