The Unbearable Lightness of Crony Capitalism
The bitter truth about the economic policies of the UPA government is that the poor have been left to fend for themselves, while the State pampers the millionaires and billionaires and helps them to grow richer. Will this be the message to the people of India in this budget?
Hardnews Bureau Delhi
At a recent event organised by a television channel to declare the 'Indian of the year', Congress General Secretary, Rahul Gandhi, who was part of the audience, was cajoled by the organisers to ask a question while film star Shah Rukh Khan was occupying the dais. His question was a Freudian slip of what was going on in his troubled mind. He wanted the film star's advice for politicians. Khan expectedly pontificated the usual cliché that politicians should not be corrupt and should have integrity.
Khan is hardly the person from whom Rahul Gandhi should have publicly sought advice. Surely, the multi-crore box office actor, who can sing and dance even in private weddings for money, is not much high on social vision, intellectual credibility or political insight. And he is no philanthropist, philosopher or cinematic great of world cinema. Surely, if he had witnessed this TV show, Rahul Gandhi's proud and cerebral great grandfather would have been devastated by the not-so-young man's public display of his own (and his party's) confusion. Also, Khan's simplistic, even if well-intentioned prescription, is unlikely to help the Congress to claw out of the deep political abyss it finds itself in after a series of embarrassing defeats in the last few assembly elections.
The Congress leadership does not need a public lesson on morality from a money-spinning freelancer, what it needs is serious introspection on why it is losing ground steadily to its aggressive opponents. The party should try to figure out why the much vaunted charisma of their leader Sonia Gandhi and her son is not working any longer in large parts of the country. Expensive election campaigns and mindless controversies have not yielded the kind of dividends the Congress was expecting in the much hyped polls in Gujarat and Himachal Pradesh. In Gujarat, Sonia and Rahul Gandhi, to their credit, campaigned hard to help the party regain power, but it did not work. Hindutva Hriday Samrat Narendra Modi won.
The defeat in the western state was not a fluke. Decline in the party's fortunes has been steady after it came to power in 2004. In the early part of 2007, Congress did very badly in the Uttar Pradesh elections and belied the expectations that were raised by the well-orchestrated and choreographed campaign by Rahul Gandhi. He got the crowds in some places, but no votes. Colossal amount of funds, quite like in Gujarat, went down the tube without showing the desired results.
So what is really wrong with a party that accidentally came to power in 2004?
“It is economy, stupid!” would have been sincere advice to anyone who is in power. This is the fundamental reason behind why the ruling party is performing so poorly in grassroots politics. The charisma of leaders works better when they represent policies that show fealty towards the poor and the needy. Remember, Argentina cried for Eva Peron because the poor in that country thought the former first lady stood for them. That lesson seems to have been forgotten by our leadership in the country.
The Congress got the support of Dalits, Muslims and other marginalised social constituencies over the years because it was able to convey the impression that it was determined to eradicate poverty through its 'garibi hatao' and 'aam aadmi' promise. They also inherited the legacy of the freedom struggle when its committed leaders went to jail repeatedly, faced police brutalities and made sacrifices in their relentless work with the masses, especially the poor. Mahatma Gandhi exemplified this truth, and so did Nehru and others. (Indeed, others too made incredible sacrifices, like the communists, Bhagat Singh, Chandrashekhar Azad and other revolutionaries. And they all dreamt of an equal, egalitarian and free socialist democracy.)
The open State patronage to the corporate rich and upwardly mobile classes is an issue which is more relevant in 2008 when the country will be facing 10 assembly elections and the UPA government will be presenting its last budget before it goes to the polls in 2008-09. The budget presents a last opportunity for the Congress-led UPA government to correct the impression that it is brazenly elitist and has virtually no inclination to address the problems of the vast majority of the poor and needy. Clearly, it has to distance itself from the macroeconomic bounce as manifested by an irrational sensex that is invariably manipulated by a microscopic handful of stock market players.
The NDA government forgot the importance of the poor when they went overboard selling their 'Indian Shining' campaign to them when they were surviving on crumbs. Expectedly, those not enamored with their campaign — and they were in big numbers — rejected them.
The moot question is, can the Congress leadership re-invent itself or at least look at its glorious past to reorient itself? If the conduct of the government in the last four years is anything to go by, then the party's leadership has not displayed the mettle required to address itself to its shortcomings. They have created an artificial, false and synthetic reality with the help of their cronies and believe that this would help them get support from the poor and miserable. Certainly, the economically disenfranchised have voted with their hands and feet against them whenever they got a chance.
During the run up to the UP elections, this reporter met many people who were able to discriminate between the misery heaped on them by the policies of the central government and the problems caused by the state government. They were categorical that the inflationary price rise had a central origin, despite claims by the central government that inflation was under control. The reality check by ordinary people when they purchased vegetables, foodgrain or fuel and gas, made it amply clear how expensive life had become due to the neo-economic policies. The consumer price index has galloped even when the wholesale price index has been deliberately pegged low.
The UPA government is keeping oil prices in check as it fears that the mirror of the 'feel good' factor in the economy would crack up. They are now trying to keep the prices low as they realise that it would feed runaway inflation and destroy whatever chances they have of recouping lost ground.
Indeed, how long can they procrastinate on this vital decision?
Besides price rise and unemployment, there are other areas of concern that the government would have to tackle in the coming days. The most serious is that of housing. After the government liberalised FDI in real estate, housing in the urban areas have gone out of the reach of the middle class. The poor are in any case out of the 9 percent growth 'booming economy'. In the contemporary era, it is just impossible for wage-earners to own a house and live with dignity. (See Hardnews package on housing problems in this issue: pg 36).
Instead of providing affordable housing to the middle class, the Manmohan Singh regime has expanded its ample energies in creating special economic zones (SEZs) — which are mostly seen as massively lucrative land scams. They have made light of all the people's peaceful movements against the SEZs. Instead, the government has been gifting thousands of acres of fertile agricultural land of farmers and tribals at throw-away prices to big business groups under the British era's draconian Land Acquisition Act.
Every legitimate objection has been tackled by using brute force, or referring the matter to the group of ministers (GOM) — to give an imprimatur of the entire cabinet — or the courts. Interestingly, the majority of issues the GOM (appointed by the government) deal with involve issues concerned only with the money bags. Indeed, it would have been interesting if the government had used the GOM instrument to figure out ways to find affordable housing, tackling degrading poverty, working on an efficient, accessible health system, helping unorganised labour, creating jobs for the poor, or cleaning up our dirty cities and rivers.
Quite evidently, the priorities of the government have been driven by cronies who have prospered by jacking up the stock market or by bending State policies to their advantage. “What we are looking at is a bigger game where the government changes its policies to suit the needs of crony capitalists. The scale of corruption is far bigger. It is a sellout,” says a disgusted senior official.
The UPA government's much hyped flagship programme, the National Rural Employment Guarantee Scheme (NREGS), has failed to create a ripple in most parts of the countryside. The programme was meant to provide Rs 60 per day for 100 days in a year. Audit reports and investigations by NGOs show colossal amount of money being siphoned out of the programme. There is nothing to show that the gains from Rs 15,000 crore in the first year of the programme has reached large sections of the jobless poor in rural areas. Perhaps, only 7-10 per cent have benefited from the employment guarantee scheme.
The fact is, leakage from the funds has created a venal class of contractors and fixers who manipulate politics on the ground. In some places leaked funds from the NREGS have been used to sustain the Maoists and Naxalites, who are getting new recruits due to growing pauperisation in the countryside. It is believed that the Salwa Judum of the 'adivasi militia' used by the government in Chhattisgarh against the Maoists has been triggered by the rebels' armed struggle against the proposed SEZs being given to big business on a platter. Besides, the Salwa Judum, which is like using the 'people versus people' technique as in Vietnam, has boomeranged, with several killings, and thousands rendered homeless.
The NREGS has a multilateral origin. Nothing much could be expected except the creation of a thin but powerful layer of corrupt politicians, bureaucrat and contractor nexus. Every World Bank project has suffered from this malaise. Recent World Bank investigations have shown that large part of the funds in the development sector has been leaked. This is not the first time such allegations have been made. Multilateral funding serves only one purpose: to fatten the ruling elite in rural and urban areas and make them dismantle the State sector.
The wilful destruction of the public sector (like the public distribution system and State-driven sectors) and the rise of cronyism can be traced to unfettered privatisation due to liberalisation without putting in place a decent regulatory system. Shah Rukh Khan's advice that politicians should be less corrupt would be useful if the government is keen on tweaking its delivery system. A well-intentioned programme would fail if the implementation is blighted by widespread corruption and entrenched inefficiency. The absence of grassroots activism and internal democracy in political parties could check large-scale corruption visible in government programmes, but experience has shown that the criminal mafias that are involved in milking the system are provided protection by several sections of big business.
After all, it is the local mafia that provides many of the SEZ developers and new retailers the muscle to smother opposition and crush non-violent people's movements. Besides, industrialists can't use the State machinery, employ police or party cadre everywhere — like in Kalinganagar and Nandigram — to have their way.
The bitter truth about the economic policies of the NDA and the Left-backed UPA government is that the poor have little cushion and they have been left to fend for themselves while the State pampers the millionaires and billionaires and helps them to grow richer. This is the message to the majority of the people of India.
The suicide of thousands of farmers in different parts of the country, including in Congress-ruled states like Maharashtra, provides evidence of the crass insensitivity that has gripped the Indian State. (The Agriculture Minister, Sharad Pawar, is clearly more obsessed with big bucks cricket then farmers killing themselves in hundreds in his own backyard.) More than 1.5 lakh farmers have died in the last few years. And this is a conservative estimate. This is despite the fact that Prime Minister Manmohan Singh went to Vidarbha in Maharashtra, scene of hundreds of farmer suicides, and promised urgent action. Shortly thereafter, there were more suicides, even while he was on his way back to Delhi.
With so much of money going around in the economy with global mergers, big booms and moneybags snapping up cricket clubs for millions of dollars, would it not make sense for government agencies or even some of these crony capitalists to adopt villages where people are dying due to indebtedness or hunger. But this is asking too much from a socially insensitive, shallow and inegalitarian elite with no long-term vision for the entire country.
Election setbacks provide opportunities for political parties to make serious and practical corrections in their policies and orientations. Those who forget this important lesson will be condemned to political wilderness. Then one day, they too must rediscover themselves in the gutters of history.