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The
Chairperson of the UPA, Mrs. Sonia Gandhi, and the government
that she helped to create, appear to inhabit two very
different countries. The India Mrs. Gandhi lives in
and travelled through widely during the election campaign
is a country in the throes of economic crisis, especially
in the countryside. It was the people of this country
that she recognised and addressed, in all the speeches
she gave about the problems faced by farmers, the lack
of jobs for the people, the inadequacy and poor quality
of the most basic public services, the hunger and despair
that affect backward regions, the growing inequality.
It
was the voters of this country who, in response to such
recognition, created the dramatic and decisive popular
unseating of the previous government, and by implication,
the rejection of the policies and processes that it
had set in motion. And it was to the people of this
country that promises were made by the new UPA government,
in the form of a Common Minimum Programme that pledged
to rectify all these unfortunate consequences.
But the new government - or at least some influential
elements of it - seems to exist in a completely different
country, where apparently none of the problems mentioned
above are significant or even particularly evident.
Instead, this section apparently is in a country that
is shining in much the same way that the previous government
had tried to claim, in which the problems highlighted
by the Congress and its allies before the elections
simply do not exist.
The Economic Survey, released by the Finance
Ministry just before the presentation of the delayed
Annual Budget, is supposed to be an accurate portrayal
of the state of the economy in the previous year. Instead,
it reads like paean to the supposed material and policy
successes of the NDA, even when these claims of success
are (and have been shown to be) demonstrably false.
Consider the economic review of developments in the
very first chapter. Much is made of the high rate of
GDP growth (in excess of 8 per cent per annum) which
has been achieved only three times earlier in independent
India. While it is briefly mentioned that this represents
a recovery from the slump of the previous year, the
point that even then, total agricultural production
did not reach the level of two years ago is not mentioned.
Similarly, that most of the growth occurred nonetheless
in agriculture (from a very depressed base) and in hard-to-measure
services, and not manufacturing, is glossed over.
But the real dishonesty lies in the assessment of government
policies over this period and their impact. The
Survey accepts in toto the (largely false or exaggerated)
claims made by the previous NDA government.
For example, the Survey says that ''the Budget for 2003-04
undertook to provide a major thrust to infrastructure,
principally to roads, railways, airports and seaports,
through innovative funding mechanisms. The total cost
of these projects was estimated at about Rs. 60,000
crore.'' It also claims that ''implementation on these
schemes has made substantial progress''. What it does
not mention is that hardly any of the tall claims made
were realised, that barely Rs. 2,000 crore was spent
from the public exchequer, that most of this went to
high-publicity road projects along the Golden Quadrilateral
which have been associated with massive corruption and
the killing of whistle blowers, and that the actual
implementation was nowhere near the promises made.
Similarly, the Survey claims that ''the softening of
interest rates … has provided a climate conducive to
investment growth'' but does not mention that such investment
growth did not occur. Instead, it chooses to focus on
''the improvement in stock market valuation and the flurry
of activity in primary markets'' as justifying optimism
about investment, even though the evidence points to
continued slack in the economy. The Survey also lists
various programmes and legislation passed by the government
as major achievements, although there was no visible
positive economic impact over the concerned period.
One of the most mendacious claims relates to the decline
in the extent of poverty. The Survey claims that ''it
is well known that there was a significant decline in
poverty from 36 per cent in 1993-94 to 26.1 per cent
in 1999-2000.'' It does not mention the less publicised
fact that even the Planning Commission has admitted
that the estimates for these points in time are not
comparable. Actually, the consensus among independent
scholars now is that the rate of decline of poverty
slowed down appreciably over this period. Instead of
providing the information on average calorie consumption,
which shows a disturbing decline, the Survey only cites
improbable estimates of subjective hunger to claim that
just 0.5 per cent of rural households and 0.1 per cent
of urban households are chronically hungry.
On the other crucial issue of jobs, the Survey barely
touches upon the decline in aggregate employment generation
and the collapse in formal sector employment. Instead,
it uses the thin samples of NSS (which are notoriously
unreliable) to repeat the claim made in the BJP’s election
propaganda, that 84 lakh new jobs were created every
year in 2000-02.
Even in terms of issues and priorities, the
Survey appears to belong to the previous government
rather than the current one. There is no mention of
the six major gaols of the UPA as stated in its Common
Minimum Programme. (Incidentally, two of these
are: to ensure that the economy grows in a sustained
manner over a decade and more and in a manner that generates
employment so that each family is assured of a safe
and viable livelihood; and to enhance the welfare and
well-being of farmers, farm labour and workers particularly
those in the unorganised sector and assure a secure
future for their families in every respect.)
Instead, the Survey mentions the following challenges:
achieving an annual growth rate of 7-8 per cent in next
five years; containing annual inflation to single digit
levels; boosting agricultural growth through diversification
and agro-processing; expanding industry by at least
10 per cent per year; effecting fiscal consolidation
and eliminating the revenue deficit. This is very much
the standard hackneyed stuff, which focuses on variables
that would please the markets rather than address the
needs of the people, and completely ignores the most
pressing problems of employment and insecurity of livelihoods
that are currently facing the populace.
The most charitable explanation of how this extraordinary
- and misleading - document has come to be released
by the UPA government, is that it was already written
as a pre-election advertisement by the policy hacks
of the previous government, and those in charge were
simply too lazy or too callous to bother to change much.
A harsher explanation would suggest that there are deeper
and perhaps less forgivable motivations on the part
of those who have produced this document.
Essentially, the economic policies of the past decade,
while they have produced greater insecurity for most
of the people, have been enormously beneficial to a
small minority. It was this minority for whom India
was shining, and it is this minority that still retains
substantial control over the levers of economic policy
making.
The temptation to brush aside or ignore the mandate
of the people must be very great, especially if that
mandate requires some changes in or reversals of policies
that have so clearly delivered disproportionate benefits
to the rich. But how can there be ''business as usual''
if it is admitted that these policies did harm most
of the people? So much simpler just to pretend that
actually everything has been wonderful for everyone
all along, and that all those who feel that their economic
conditions have worsened are simply imagining things.
This will allow the old policies to continue, and maybe
if people are told often enough that they are actually
much better off, the lie will become true through sheer
repetition.
Or could it be that even deeper processes are at work?
It does not take much insight to realise that one
of the greatest failings of the previous government
was that it believed its own lies, and thereby became
completely disconnected from the people. Perhaps there
are some inside the present government who want to encourage
it to go the same way, not for its own good
or the good of the people, but for a more insidious
reason. The Congress Party and its allies would do well
to examine more carefully the people they are allowing
to run loose in government, and see whose interests
they really serve. Callousness to issues that the elections
raised and pandering to illusions of ''shining'' may
be necessary to continue with ''reforms as usual'',
but this is also a prescription for expulsion from power.
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