Friday, June 1, 2012


Most newspapers, magazines and television channels have been spouting wisdom and much more about 3 years of the current UPA regime. I think, it would be more honest to look at 8 years of the UPA. After all, it was in 2004 that Dr Manmohan Singh was appointed (mark my words: appointed, not elected) the Prime Minister of India. The composition of the alliance may have changed, like the Left no longer being a part of the dispensation. But the core of the UPA has remained the same over the last 8 years.

Before I write about the eight and half lessons that we Indians can draw from 8 years of the UPA regime, allow me to describe the two principal leaders of UPA. First, Sonia Gandhi. No matter what her critics say, the fact is that she has revived the Congress when it looked like all was lost and displayed more political astuteness and maturity than most other leaders. Then Manmohan Singh. No one can doubt his personal integrity and the wealth of experience he has as an administrator. Besides, no one should even begin to doubt their commitment to India.

And yet, things are in a sorry shape and the remarkable story of the rise and rise of India is now becoming one of gloom, despair and anger. Very clearly, something has gone horribly wrong. I don’t need to bore you by recounting statistics to show how badly things have gone wrong. It is crystal clear that the two top leaders of the UPA and their advisors must do something drastic, and something soon. Otherwise, the India growth story and the UPA will both be history in 2014. But before they do anything, here are eight and half lessons they can draw upon.

Lesson number one is perversely biblical – the road to hell is paved with noble intentions. Sonia Gandhi gathered together a band of highly educated, articulate and committed individuals and formed the National Advisory Council. No one doubts the sincerity of the NAC members and their noble intentions. After all, who in her right mind would refuse to accept inclusive growth as an ideal? And we all applauded initially when a landmark legislation like RTI was passed. We were less enthusiastic, but still reluctantly supportive, when it came to the NREGA. We wondered how the Food Security act would be implemented in corrupt India. We shook our heads in wonder when the Forest Act was being foisted. And the logical climax was when the horror called the Communal Violence Bill was midwifed. These noble intentions will rip apart the very fabric of Indian society. I am all for resurrecting Mother Teresa and letting her run India. But is that how you run a complex nation in the 21st century?

At least the jholawala NAC types look suitably humble, if infuriatingly sanctimonious. Lesson number two is about the so called political deal makers of the UPA, who have been insufferably smug and arrogant when it comes to dealing with opponents. Most of us remember how Congress spokesman Manish Tiwari had to go quiet for months after heaping abuse on Anna Hazare. We forget how UPA managers simply did not bother to consult any opposition party on how to tackle the movement growing around the Lokpal Bill. And do remember how leader of the opposition Sushma Swaraj protested that her opinions were rudely ignored when it came to appointing a new CVC. It was only when the Supreme Court cancelled the choice of the UPA that its arrogance was exposed. Confidence is great, insouciance is maybe ok, but arrogance usually comes back to haunt you.

The third lesson that the UPA could have learnt was from the failure of the NDA in managing allies. It was the loss of “allies” like National Conference, AGP, Telugu Desam, BJD, Trinamool Congress and the DMK that cost the NDA both power and a possible future. And yet, UPA managers have persisted with the folly of either treating allies disdainfully or bowing and scrapping to their whims and fancies. It is only the lure of power and the fear of elections that is keeping the allies in the fold. The moment they sense that the BJP – despite its suicidal tendencies – is going to benefit big time from a backlash against this regime, the allies will scatter like a flock of birds. Strangely, ally management still seems to be a huge headache for the UPA despite 8 uninterrupted years in power.

Even with disgruntled allies, the Congress and the UPA could theoretically use a trump card called populism; the way NREGA and farm loan waivers were used by UPA 1. Only a fool will say that populism never pays electoral dividends. And yet, basic economic theory teaches us something called the law of diminishing marginal utility. A voter will never mind a sop, but the more sops you throw at her, the less attractive their marginal utility. If you travelled in small town and rural India in 2008, there seemed to be genuine admiration for the NREGA. Today, you won’t find that kind of enthusiasm for Food Security and Right to Education. Hell, the voters are so angry, that they will take the sops and vote against you anyway. As the UPA strategists brainstorm about a wave of sops in the run up to 2014, they do seem to be ignoring this lesson number five.

Lesson number six is inextricably linked to the previous one – there really is no such thing called a free lunch. Someone, at some time or the other – often sooner rather than later – has to pay for it. Thanks to the initiatives of the jholawala NAC members and also thanks to vested interests, India is awash with subsidies of all kinds. We have LPG subsidies in excess of Rs.20,000 crores enjoyed mostly by middle class India. We have fertilizer subsidies in excess of Rs.80,000 crores enjoyed mostly by rich farmers and fertilizer companies. Welfare schemes have been launched by the UPA as if it is a medieval monarchy that is pleased to share a bit of the royal treasury with its restless subjects. No amount of common sense argument has convinced the jholawalas that virtually all this money is lining up the pockets of corrupt middlemen, bureaucrats and politicians. They want even more money to be thrown at the subjects. And why would vested interests voluntarily surrender subsidies? Something has to give. And it has started giving. Deficit levels in the economy are reaching alarming proportions. Perversely, this will result in even more inflation and even more misery for the poor in whose name the UPA claims to rule.

The UPA could have gotten away with ignoring lesson number six if lesson number seven had not kicked into play. And that is about how bad and arbitrary policies can kill growth. Let’s take the aviation sector. By 2005, it did appear as if an average Indian can actually take a flight. And then started a slew of arbitrary policies. Rules were rigged and transparent policy making was thrown in the dustbin. Suddenly, you find that the whole sector is in a mess and that airfares and stupid airport charges have gone up so high that flying is once again a dream for the average Indian. Then look at how the one great infrastructural leap of India – the highway modernization and construction project launched by the NDA government – has been killed by arbitrary policy making. And who can forget the mess that is the telecom sector today? Discretionary power and arbitrary policies have become the norm. Today, you ban cotton exports; tomorrow you resume them. Today you announce this rule; tomorrow you scrap it. The results are obvious. From about 9% a year, GDP growth rate is slipping to less than 7%. This is bad news not just for every Indian, but particularly so for the jholawalas. Lower growth rates means lower tax collections and lesser money to throw at subjects. And blaming the crisis in Greece for this mess is like blaming Alexander the Great for letting future invaders realize how easy it is to invade and plunder India!

And that brings us to the final lesson number 8 – the voter is not a fool. Look at the facts. The UPA lost miserably in Bihar. It won West Bengal, but thanks mainly to Mamata Bannerjee. It barely won a majority in Kerala despite an unpopular Left government. It was decimated in Tamil Nadu. It was decimated in Uttar Pradesh. It just about managed to form a government in Uttarakhand despite massive incumbency. And the Akali Dal-BJP combine was swept back to power in Punjab. In a few weeks time, bye lections to 18 assembly seats in Andhra Pradesh will deliver another body blow. Arresting Jagan Mohan Reddy is not going to change that. The bells are tolling. But is anybody in the UPA listening?

I speak about eight and a half lessons. The half is about that half empty glass – or should I say petrol tank?