All for the ‘aam aadmi’

The Prime Minister has taken some “hard” decisions to rev up the economy. Hard in the sense that they will make everyday life even more difficult for the common man in terms of the prices he has to pay to keep body and soul together. Indeed, it is only the increase in the price of diesel which will have an immediate impact on the poor citizen’s monthly budget through increasing prices of daily necessities which have to be brought to the market by vehicles using diesel. FDI in multi-brand retail and domestic civil aviation will not have this kind of immediate impact.

In his speech to the nation a few days ago, Manmohan Singh explained why the diesel price had to be raised. To quote him: “Where would the money for this have come from (to foot the huge subsidies bill)? Money does not grow on trees. If we had not acted, it would have meant a higher fiscal deficit, that is, an unsustainable increase in government expenditure vis-a-vis government income. If unchecked, this would lead to a further steep rise in prices and a loss of confidence in our economy. The prices of essential commodities would rise faster. Both domestic as well as foreign investors would be reluctant to invest in our economy. Interest rates would rise. Our companies would not be able to borrow abroad. Unemployment would increase.”

Political result

What has been the political result of these decisions taken by the Government after the Lok Sabha went into recess? Trinamool Congress has withdrawn support from the Government while friendly noises have been made by parties such as Mulayam Singh’s Samajwadi Party, Mayavati’s Bahujan Samaj Party and the Dravida Munnetra Kazhagam, on whose support the future of Singh’s government is totally dependent. So, the issue boils down to just this: even if the UPA Government “is the government of the aam aadmi (as Singh said in his message), he will be able to implement measures to get the national economy out of the rut it is in only if these parties allow him to enjoy a majority in the Lok Sabha. The question is, will they?

Congress’ hope

The leaders of every one of these parties, including those of the Bharatiya Janata Party, the Trinamool Congress, the Biju Janata Dal, the Communist Party of India (Marxist), the Rashtriya Lok Dal, will act keeping the prize of the seat of power in New Delhi firmly in front of their eyes. Every single politician in India wants to wield power, even at the cost of political stability. So each one of these parties will say things and take decisions keeping that ultimate prize as their single point of reference. In India, the godsend is that there is stiff competition among all these parties, one against the other and groups of them against other groups, with the result that the very mechanics of intense rivalry among themselves more often than not reduces the impetus of their actions — in this case towards political instability — to zero.

Briefly, this is Singh’s — and the Congress’ — hope. Seen from this perspective, he did well to appeal to the people for support, over the head of the political class, when he said: “Please do not be misled by those who want to confuse you by spreading fear and false information. The same tactics were adopted in 1991. They did not succeed then. They will not succeed now. I have full faith in the wisdom of the people of India.”

The problem is that all politicians have faith in the wisdom of the people. And when elections come around, the vote of the aam aadmi cannot be taken for granted — by anyone.

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