Debating India


Whose agenda?

Saturday 13 August 2005, by ATHREYA*Venkatesh

Tasks before the new government.

AS the National Democratic Alliance (NDA) Government in New Delhi settles down, attention should shift to the question of the agenda before it.

There has already been considerable discussion in the print and electronic media on the agenda. The overwhelming focus has been on economic issues. The captains of industry, speaking through various industry associations, have been especially vociferous in spelling out the economic agenda.

The concern with economic issues, and the sense of urgency about them, is understandable. During the election campaign, the two main formations in the fray - the NDA and the Congress(I) - pushed economic issues into the background.

The NDA campaigned almost solely on the plank of A.B. Vajpayee’s virtues, and the fact that he was "able and stable" prime ministerial material, while the Congress(I) claimed that it alone had in the past provided a stable government, and it alone could do so again. It was only the Left parties which projected economic issues, both in their manifestoes and in their campaign. However, the Left had accorded primacy to the issue of secularism even while attacking the economic policies of the BJP, which con stituted both the continuation and intensification of neoliberal policies pursued by the earlier Congress(I) and United Front governments. Given this fact and the limited reach of the Left, economic issues did not figure prominently in the election campa ign. Of course, the telecom scam hit the headlines, but was not sustained as a campaign issue in a big way.

It is now obvious that the new government will have to contend with several urgent economic issues. The National Council for Applied Economic Research (NCAER) has described the fiscal situation as "...a source of grave concern".

The pressure on the government’s finances is coming from both the revenue and expenditure sides. While revenues have grown by only 13 per cent as against the projected 19 per cent, the additional expenditure on the Kargil war alone is estimated by some sources at more than Rs.5,000 crores. The Central government’s net borrowings in the first two quarters of the current financial year at Rs.50,331 crores amount to 87 per cent of the amount budgeted for the entire financial year 1999-2000. The fiscal def icit is expected to reach 6 per cent of GDP and will exceed the figure if public sector disinvestment does not generate the budgeted provision of Rs.10,000 crores.

The current rate of inflation is quite low, this being the result of a very high base created by the extraordinarily rapid increase in primary product prices earlier. However, with ’normalcy’ in primary product prices getting restored, and several new in flationary pressures emerging - witness, for instance, the sharp rise in petroproduct prices - the rate of inflation is expected to reach 7 to 8 per cent by the end of the year. In fact, a feature of the neoliberal policy regime of the 1990s has been the coexistence of a high inflation rate with sustained recession. The average annual rate of inflation for the decade of the 1990s is close to 9 per cent.

These emerging economic issues apart, there is also an air of expectancy among the corporate sector leaders of some quick and decisive action from the NDA government, now that its parliamentary majority is not as precarious as that of the previous regime . The industry bodies - the Federation of Indian Chamber of Commerce and Industry (FICCI), the Confederation of Indian Industry (CII) and so on - have put forward the following agenda.

* Clearing, within two to three months, the backlog of economic legislation pending before Parliament including the Companies Bill, the Insurance Regulatory Authority (IRA) Bill and the Foreign Exchange Management Bill;

* Privatisation of the public sector by bringing down government holding below 51 per cent;

* Allowing 74 per cent foreign equity in the car, auto component, bulk grain handling and tourism sectors;

* Financial sector reforms including privatisation of banks;

* Easing of price controls in the pharmaceutical industry;

* Approval of the new telecom policy;

* Focussing on intellectual property rights, and the agricultural and services sectors at the World Trade Organisation (WTO) coming up in Seattle.

The corporate agenda is quite in line with the policies of the previous BJP-led government. During its 13-month rule, the BJP-led government had pursued neoliberal policies with greater vigour than all its predecessors. It opened up the economy to foreig n investors in a big way, pushed hard the agenda of privatisation of public sector undertakings, provided several tax concessions to the corporate sector, and substantially raised the issue prices of rice, wheat and sugar provided through the public dist ribution system (PDS), besides hiking other administered prices and tariffs.

Interestingly, in anticipation of its return to power, the caretaker government had been busy making plans for the pursuit of an economic agenda largely consistent with what the corporates have now sought. Thus, the core group of Secretaries of the Gover nment of India have finalised plans for the sale of several public sector undertakings including the Indian Petrochemical Corporation Limited (IPCL), the India Tourism Development Corporation (ITDC) and the Gas Authority of India Limited (GAIL). Close on the heels of the sharp rise in diesel prices announced by the caretaker government a day before counting of votes began on October 6, the Petroleum Ministry mooted proposals for hikes in the prices of kerosene and liquefied petroleum gas (LPG). The Prim e Minister himself was quoted as saying that once the new government is in office, the IRA Bill will be passed in three days’ time.


Prime Minister A.B. Vajapayee addresses NDA leaders and MPs in the Central Hall of Parliament on October 10. It is obvious that the new government will have to contend with several urgent economic issues.

It is interesting to note, however, that while the NDA manifesto had spoken of continuing with the reform process, it also claimed that it would "... give it a strong swadeshi thrust..." and reappraise and revitalise reforms through giving primacy to removal of unemployment.."

It is clear that the economic agenda of the new government will largely be in line with the needs of the demands of the corporate sector, Indian and foreign, and that there would be a fair degree of consensus among NDA partners on the matter of the agend a. The socio-political agenda of the new government is, however, an issue on which consensus will be less easy to forge.

During the election campaign, while the NDA manifesto steered clear of the contentious issues of Ayodhya, Article 370 and a uniform civil code, this was not necessarily true of the actual campaign itself. In communally sensitive constituencies (such as C oimbatore in Tamil Nadu), a clear effort was made by the BJP to consolidate the ’Hindu vote’, with a not insignificant degree of success. It would, therefore, appear somewhat naive to assume that the presence of such parties as the DMK or the TDP would e nsure that the dominant partner BJP will abjure communal mobilisation and stick to the parameters agreed upon among the NDA partners. In fact, the rather evasive remarks of senior BJP leader L.K. Advani, to a question on whether the Ayodhya issue was bei ng postponed or given up, provides a clue to the dilemmas facing the BJP leadership as well as the NDA. Clearly, the BJP’s agenda is not the same as that of the NDA’s, and equally pertinent, the RSS/VHP/Bajrang Dal agenda is not in every instance (though it is in the main) necessarily identical to that of a BJP in government.

In an important sense, this election has shown that communal mobilisation is not always efficacious even in electoral terms. Where clear alternatives to the BJP’s communal-plus-neoliberal agenda were present, they have received popular support. The perfo rmance of the Left forces in Kerala, West Bengal and Tripura and that of the S.P. and the BSP in Uttar Pradesh bear this out. On the other hand, as already noted, communal mobilisation has helped the BJP win in several constituencies. The political and s ocial forces which seek to fight for a secular and democratic polity will need to keep this complexity in mind, and hence also the need to retain the focus on the three inter-related goals of secularism - social justice and economic equity and self-relia nce.

An issue of which much was made in the NDA manifesto is that of constitutional reforms. The NDA sought to make the ’stability’ of an elected government - and guarantee of its continuity throughout the five-year term of the Lok Sabha - the focus of such r eforms.

Leaving aside the essentially undemocratic proposals that seek to ensure a five-year term for an elected government at all costs, an issue that is of longstanding importance and is bound to come up is that of Centre-State relations. Going by the record, both the BJP and the Congress(I) have tended to ride roughshod over elected State governments, and have sought to utilise Article 356 to bring them down. In the present coalition dispensation, that would be rather more difficult. Be that as it may, a wel l-thought-out overhaul of Centre-State relations in order to ensure a genuinely federal, democratic and pluralist polity, which strengthens the Union as well as the States, should certainly be on the nation’s agenda. To this, one should add further decen tralisation of power and authority to elected local bodies, as well as reservation for women in Legislative Assemblies and parliament as issues to be addressed urgently.

FINALLY, does the BJP/NDA agenda correspond to the needs of the people of India? It unfortunately does not, in most respects. Its agenda of continuance and intensification of the reform process, including the carrying out of the so-called second generati on of reforms, flies in the face of people’s experience with the neoliberal economic policy regime for nearly a decade now. These nine years of economic reforms have not led to accelerated growth, nor to significant reduction of poverty or unemployment. There have been no major breakthroughs in such areas of human development as education or health, despite lip-service to such goals as part of the official rhetoric on reforms. The economy today is far more vulnerable to external shocks and the policy ma kers find themselves increasingly constrained by the need to attract foreign investors and keep them happy. The failure of the state to mobilise resources for development is evident in the decline in the tax-to-GDP ratio and the sharp decline in governme nt capital formation, a decline not compensated by private investment. The erosion of the PDS imperils the people’s food security. India’s weakness at the WTO forum weakens the nation’s economic sovereignty. The economic agenda really ought to address an d reverse these developments, rather than pursue neoliberal economic policy as the panacea for all ills.

Similarly, on the socio-political front, securalism, and commitment to India’s socio-cultural, linguistic and religious plurality are essential to ensuring political stability, which can hardly be guaranteed by mere parliamentary arithmetic.

There is, of course, the all-important question of nuclear policy. In the months to come, the consequences of Pokhran-II will come to haunt India repeatedly, as they have already done in Kargil. The pressures to sign the Comprehensive Test Ban Treaty (CT BT) will be strong. The straws in the wind - witness Murli Manohar Joshi’s statement to the effect that India was ready to sign the CTBT, all that remained was to get the NDA partners to agree - indicate that the NDA partners, many of whom have in the re cent past held forth on the inadvisability of signing the treaty, would have to be vigilant.

Finally, there is the larger issue of India’s foreign policy, its role in a unipolar world and its relations with major countries as well as its neighbours. The complex questions of foreign policy need a far more nuanced discussion than would be possible here. Suffice it to say that cozying up to the United States, allowing it to intercede in the Kashmir issue in the hope that it will favour India as a regional power or announcing China as the country’s main enemy - these hardly constitute an inspiring record.

As the nation faces a complex agenda, the incongruence between the people’s agenda and that of the NDA/BJP is bound to have implications for economic and political stability.

See online : Frontline


Volume 16 - Issue 22, Oct. 23 - Nov. 5, 1999.

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