Debating India

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Monday 8 May 2006, by JHA*Prem Shankar

The idea of forming a third front that includes neither the Congress nor the BJP has been around ever since the short-lived Janata Dal/National Front government of 1989-90. Today, it’s gaining yet another lease on life.

Most of the speculation in Delhi is centred on whether the numbers for such a government to be formed exist. The key, needless to say, rests in the hands of the Left Front. If it does as well as expected in Kerala and West Bengal and if the AIADMK succeeds in wrestling power away from the DMK in Tamil Nadu, a wave may begin to build up that will suck in fence-sitters like the Telugu Desam, which is more than disenchanted with its erstwhile poll ally the BJP, and the ever-discontented Mulayam Singh Yadav. If the wave builds high enough, it could even sweep the JD(U)-or the Samata elements in it-into its fold. So if all of these wishes turn into horses, we will soon have another government!

What no one seems to be interested in asking is what kind of government will it be? Will it be better able to meet the challenges that the UPA is grappling with? Will it be able to complete the delicate peace negotiations with Pakistan and the various Kashmir separatist groups? Will it continue the important engagement with the US upon which India’s future access to cutting-edge technology depends? Will it be able to raise the price of petroleum products so that just Indian Oil alone ceases to add Rs 2,400 crore a month to the budget deficit? Will it be able to find the Rs 1,500,000 crore of resources needed to bring the infrastructure back to a minimum acceptable standard in the next ten years?

Will a rag-bag coalition headed by the Left leave the share markets unaffected? Will foreign institutional investors continue to pour money into the Indian stockmarket and will Indian investors continue to place their trust in the booming mutual funds of today, if Manmohan Singh is replaced by, say, Prakash Karat?

Has anyone calculated the impact? Has anyone considered just who and what will be hurt if share prices crash because of a sudden withdrawal of confidence by foreign investors as has happened in Mexico, Thailand, Indonesia and Argentina to name only a few. The plain truth is that the rupee will start to decline; this will trigger a sudden flight of foreign investment resulting in a crash in share prices and a steep rise in interest rates. Despite that, the exchange rate will continue to fall. These developments together will bring the investment boom to halt. And that will bring the tepid revival of employment growth that has taken place in the last three years after a seven-year decline to a complete halt. Is that what the poor of India, who are selling land and denying themselves food to send their children to private schools, deserve?

There cannot be a shadow of doubt that all of this and worse will come to pass if the government were to lose its majority because of a defection by the Left. There can be no doubt that the Left will form the intellectual backbone of any third front government. We just have to examine the position that the Left has taken on diesel and gasoline price rise, on the reduction of government subsidies (to free resources for infrastructure investment), on the reform of labour laws and the sale of the ailing public sector enterprises to see that none of the most pressing economic challenges will get addressed. The Mulayams of this world know all that perfectly well. So why then do they hunger so avidly for power? The answer is that for small parties all over India power is no longer a means to an end. It is the end itself. They know that rag-bag coalitions don’t last and don’t function. But they also know that six months in office can make them rich beyond their wildest dreams.

In sum, the ascension of another third front will complete India’s transformation into an African clientelist state where the purpose of coming to power is to use the resources of the state to make oneself rich and create a stable client base of supporters who will keep them in power. These sombre possibilities would not even have arisen had five states not been going to the polls. The danger will not end there-because elections will be held every succeeding year, each of which will become a referendum on the Centre’s performance. The truth is that the separation of central and state elections has fatefully weakened the Centre and made strategic decision-making almost impossible.

Worse still, the fear of annual referenda has inclined all central governments towards populism. The prospect of poll reverses next month has sufficiently rattled the Congress strategists to make them cynically revive populist proposals like the reservation of seats for the OBCs in centrally-aided universities, IITs, medical and engineering colleges, and the compulsory introduction of job reservation in the private sector. If the experience of the Janata Dal in 1990 is anything to go by, these will not merely set one Indian against the other but also cost the Congress votes. Good government will remain almost impossible till the Congress and the BJP join together to pass a constitutional amendment that reunifies central and state elections and gives each elected government a real chance to rule undisturbed for five years.

See online : Outlook India

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