UPA-II: IMAGINARY POLICY PARALYSIS?

Published: Mon, 12/08/2014 - 09:24 Updated: Sat, 12/27/2014 - 11:21

It is difficult to believe that these statistics weren’t available with the United Progressive Alliance (UPA) government at a time when it was severely disgraced, and savaged by voters in the May 2014 elections. It’s baffling why the government did not defend its gains as aggressively as, say, Brazil’s President Dilma Rousseff who recently won a re-election in the face of very hostile opposition. Take a look at the numbers and their context.

For a little over two years, the UPA was reviled and criticised for plunging the country in what was described as “policy paralysis”. What it really meant was that the UPA government, due to internal contradictions, lethargy or confusion, could not take key policy decisions that could have helped the economy take off on a high-growth path. As the rate of GDP growth slipped from 9 to 6 percent, these allegations sounded credible and knocked the bottom out from any government defence on slowdown.

Recently, an India Study Group, comprising journalists and scholars from the School of Oriental and African Studies and other institutes, put together a backgrounder on why “Faster Land Acquisition and Environmental Clearances” could hurt the Indian economy. At first, the suggestion flew in the face of the narrative that had been dominating discussions on business channels and the edit pages of the pink press, but the figures are worth poring over. The gravamen of this brief report is that, despite criticising the UPA environment minister for sitting on files worth trillions of dollars, there is plenty of evidence that more clearances were sanctioned and of a higher value than ever. Here are the chief assertions of the India Study Group:

1) Clearances granted quickly: Between 2001 and 2010, 90% of construction, hydropower and industry projects completed the entire process of environment impact assessment, public hearing and clearance within just one year (when, for large projects, in fact, a year is the normally recommended time for impact assessment alone).

2) Clearances guaranteed: In 2009 and 2010, 99% of the projects that applied for environment clearances received it; between 2004 and 2013, 99.97% of projects that sought forest clearance received it. Since May 2014, exactly one out of 65 applicants for forest clearances was rejected.

3) Clearances granted more than the capacity required: Between 2007 and 2011, the Centre for Science and Environment found that coal thermal power projects with a total capacity of 176,000 MW were granted clearance –— which is twice the thermal power capacity India has managed to instal since 1947, and 40% more than the target up to 2017. Similarly, in the same five years, steel and cement projects with more than double the existing capacity (steel) or double the targeted capacity (cement) were cleared. As we shall see below, though, it’s entirely possible that many of these “cleared” projects will never come up.

If the clearances were not an issue, why was the previous government being hammered for policy paralysis? The reason why it was criticised by the moneybags was due to the fact that, beginning 2009-2010, the government withdrew the extraordinary stimulus that was infused into the economy to save it from the scourge of global slowdown. This stimulus benefited the large companies whose fortunes bounced to a different level all-together. Second, business houses started to deeply resent the demands the banks began to make when the former failed to complete projects for which they had taken loans far in excess of their capacity. Although the Study Group talks about the resentment of the infrastructure companies of the extractive ways of the politicians, this is not all. The report is categorical that the infrastructure companies do not really countenance delays and they get their clearances quickly. What they resented were attempts by the earlier government to get approval for land takeover from panchayats or have the say of forest dwellers in this contentious process. What could be worrisome is that, in the name of ushering in “development at any cost”,  the gains of social policies of the last 10 years may get lost. The first price that the votaries of  the high-growth rate would extract from the poor would be their say in land acquisition. Diminishing the rural employment guarantee scheme (NREGA) –— that reduced unemployment by 10 percent in the last 10 years –—would contribute to further disenfranchisement of the poor. We may witness a new paradigm that would not just disrupt, but also reorder the way India has been conducting its politics in the last few years. The moot question is –— are the non-BJP parties ready to handle these changes?  

 Follow Sanjay Kapoor on twitter

Editor of Delhi's Hardnews magazine and author of Bad Money Bad Politics- the untold story of Hawala scandal.

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This story is from print issue of HardNews