Opinion
All Set for the Polls in India?
by
Amulya Ganguli
If there was
any doubt about the possibility of an early general election in India,
last Friday's union budget has removed it.
The display of massive populist profligacy in the budget, which is
evident in the writing off of Rs.60,000 crore ($15 billion) of farmers'
loans along with sharp cuts in income-tax rates, are tell-tale signs of
a poll later this year.
True, there are a few hurdles yet to be crossed. Perhaps the biggest of
them is the nuclear deal, which is vehemently opposed by the Left. But
even in this field, there are indications that the government's talks
with the International Atomic Energy Agency (IAEA) are moving forward
satisfactorily and that it will be possible before long to take the next
step towards clinching the deal.
As is known, any such initiative will make the Left withdraw its support
to the government, thereby presaging its fall. But, for once, the ruling
Congress seems to have acted with uncharacteristic cleverness on the
matter.
In fact, it is not impossible that it deliberately dragged out the
nuclear talks, thereby lulling the Left and even some of its reluctant
allies like the Nationalist Congress Party (NCP) and the Rashtriya
Janata Dal (RJD) into a false sense of security. But the government's
tactic apparently was that it would carry on the talks till it was able
to present its please-all budget.
Had it acted hastily, as when Prime Minister Manmohan Singh made his
peremptory take-it-or-leave-it offer to the Left on the deal in a
newspaper interview last December, the communists would have walked out.
And, as External Affairs Minister Pranab Mukherjee pointed out, no one
would have then signed a pact with a minority government.
But, now, having presented a budget which would please the farmers as
well as the middle class, the ruling Congress has ensured that it can
face the electorate with much greater confidence than before. What is
more, for the Left to withdraw support when the government has rolled
out such a generous package for the farmers will only make the comrades
look rather silly.
But even more than the budget, it is the possible signing of the nuclear
deal, which may well prove to be the icing on the cake for the ruling
dispensation. For it will further consolidate its hold on the middle
class, which it may have already won over with its raising of the
income-tax slab to Rs.150,000 and for senior citizens to Rs.225,000 per
year.
What may have persuaded the government to act positively on the deal is
the feedback it apparently received to the effect that the Bharatiya
Janata Party's (BJP) band of overseas supporters, especially in the US,
are unhappy with the party's cussedness with regard to the measure.
Besides, it is no secret that vast sections of the middle and upper
classes in India are in favour of the deal along with what it entails
about increasing proximity to the US. It is only the committed Leftists
and a few strategic experts with their mindset still attuned to the Cold
War who are against it.
It will be presumptuous to predict that the budget and the deal will
enable the Congress and its allies to cross the electoral Rubicon. For,
although the budget represents good politics, it is bad economics in the
sense that it is a typical, "socialistic" spendthrift measure, which
blithely ignores fiscal prudence. For one, it will make a mockery of the
institutional lending system to the horror of all practical-minded
bankers. For another, it will make fools of those who take care to repay
their loans.
What has also to be taken into consideration is that a sizeable
percentage of farmers take loans from the traditional moneylenders as
well as from relatives and friends. As such, they will be outside the
scope of the largesse, offered by the government. There is no certainty,
therefore, that the spate of farmers' suicides will register a drop.
However, even if economists carp at the government's extravagance, it
has to he remembered that the farmers' lobby has always been an
influential one in India because of the predominantly rural bias of the
economy. As such, sops such as free electricity and subsidized
fertilizers, among other things, have always been a part of the policies
of all governments, irrespective of their political hues.
Besides, the latest gesture was unavoidable for two reasons. One was the
extremely unfortunate high rate of suicides by farmers, which had both a
stunning as well as bewildering effect on the country as a whole if only
because it was difficult to understand why people were being driven to
take their own lives in such large numbers.
The second reason was the continuing belief that economic reforms
benefited only the rich and that the government was not serious about
ensuring that the fruits of the high growth rate percolated down to the
bottom.
Given such perceptions, it was unavoidable for the government to take
one step back, as it were, after taking two steps forward with its
market-oriented policies, and spread a bit of cheer in an otherwise
gloomy countryside.
Having done so, however, it has no option but to advance the date of the
polls for, otherwise, all its efforts to win friends and influence
people will be in vain.
(Amulya Ganguli is a political analyst. He can be reached at aganguli@mail.com)
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The display of massive populist profligacy in the budget, which is
evident in the writing off of Rs.60,000 crore ($15 billion) of farmers'
loans along with sharp cuts in income-tax rates, are tell-tale signs of
a poll later this year. 