Friday, October 19, 2007

‘Shining’ India Versus ‘Incredible’ India

WE MAY have to wait a few more weeks to be sure whether Mr Lalu Yadav and Mr Sharad Pawar will be able to check the US pressures and finally ward off an immediate mid-term poll. Until then the Congress will continue with its poll preparations. Fresh bouts of bonanza and concessions to different vote banks had begun six weeks back. A massive ‘Shining India’ style publicity package is the other ingredient of this campaign. Presentations have been impressive with charts and maps.

Initially, the strategic planners wanted to project the nuclear deal as a focal point and create a ‘development wave’. Even Mr Lalu Yadav had fell for the theme (‘those against the deal are against development’) and tried the ‘bijli for villages’ slogan in Bihar rallies. But the final blow came after Ms Sonia Gandhi’s Jhajjar rally. Even before this, the party’s tired campaign themes, mostly borrowed from Pramod Mahajan’s 2004 package, had failed to impress down-to-earth politicians like Mr Lalu Yadav and Mr Sharad Pawar. The NDA had realised at a heavy cost how ineffective has been the DAVP ad campaigns based on the listed achievements of the ministries.

True, the Congress can rightly boast of some of its social programmes like the NREP, Rural Health Mission, Bharat Nirman and the Right to Information Act. These were the ones looked down by the reformers as resource waste and populist profligacy. The reform lobby had resisted it when the common minimum programme was being discussed by the UPA parties. This has been the philosophy right from days of Dr Manmohan Singh as finance minister in 1991-96. The UPA had approved them on Left’s insistence and as part of Ms Sonia Gandhi’s aam aadmi concept. If some of these schemes suffered from mismanagement and outright corruption, the blame must go to the respective state governments, not the Centre.

This apart, there are striking similarities between the NDA’s old ‘Shining India’ package and UPA’s hastily crafted ‘Incredible India’ programme. The latter lays emphasis more on India’s enhanced status under the UPA government as an emerging power. Incidentally, both ‘Shining’ India and ‘Incredible’ India rely heavily on economic showpieces like GDP rise, holding price line, rising stock market index, stronger rupee, ever shooting foreign exchange reserve and services like software and BPO boom. They form the mainstay of DAVP’s proposed Rs 250 crore advertisement campaign.

Before going in for a closer look at the UPA package, it is necessary to highlight certain basic factors that had given an edge to the NDA. Mr Vajpayee decided to advance the elections by six months to take full advantage of what was then considered as a pro-NDA wave. The BJP had done impressively in Rajasthan, Madhya Pradesh and Chhatisgarh. Hence Mahajan thought the party could make a sweep in all BJP strongholds. As against this, mid-term elections are now being forced on an unwilling and unprepared UPA. While the former moved ahead with great elation, the UPA lacks the minimum self-confidence.

Second, if the NDA had gone triumphantly as a ruling party with majority, the UPA approaches the voters as a defeated caretaker government. Third, the ‘Shining India’ package came at a time when the economy was really on ascent and it had impressed the upwardly mobile middle classes. Now the GDP has reached its own plateau. Software, BPO and call centres were then growing on their own steam, giving great hopes to the educated middle class. Attrition was not known to call centres’ enthusiastic entrants. Now most of these avenues are facing gradual descent, if not outright stagnation, for reasons beyond the government’s control.

It is unfair to blame the PM or finance minister for the UPA’s dismal report card on economic front. If the NDA had been a beneficiary of a favourable global trend in early years of the decade, the UPA government has fallen victim to globalisation’s own ruthless dictums. Once you accept it, willingly or unwillingly, you have to undergo the rigors. Hereafter, domestic economies can no longer escape from the global karma. Take the SEBI index. The government may claim credit for crossing 18K. But even Mr Chidambaram now cautions the retail investors against its predatory character. Every one knows the spurt was due to the free play by the FIIs and the invisible hedge funds. Since September, a whopping Rs 18,000 crore have been pumped in by the predatory capital. US Fed cut and effects of subprime muddle have made India a temporary grazing field. Thus the sovereign India has lost powers to regulate its own market.

Efforts to check the inflation provides another instance of the new challenges being forced on domestic economies by globalisation. RBI tried all conventional methods to reduce liquidity. The steep hike in interest rate had some effect on inflation but it evoked clamour from sectors like construction and auto. The latter is under a threat of demand recession due to costly car loans. Apparently, the unchecked liquidity was due to massive borrowings abroad at cheaper rates by Indian corporates to raise capital. Finally the RBI curbs on foreign borrowings had some effect. But it is now being dubbed as violating the globalization rules.

Even this had only a marginal effect on prices. But when the UPA leaders tell the voters the prices rise is only at 3-4 per cent, it will be a cruel joke on their aam aadmi. It is the consumer index – which is still in 8 per cent range – that reflects the common man’s burden. Ten days back the department of consumer affairs revealed that prices of essential household commodities had gone up by as much as 25 per cent this year. The rise was as high as 10.4 per cent, 31 per cent, 19 per cent, 11.8 per cent, 25 per cent and 155 per cent for rice, groundnut oil, mustard oil, milk, salt and onion respectively.

Weakening of the US dollar has introduced a far more deadly infection on domestic economy. Trade balance has widened. Exports sector reports massive retrenchment and closure. Since July, government provided sops worth Rs 3,000 crore to exporters. Last week it announced tax concessions worth Rs 1,500 crore. Despite this, Federation of Indian Export Organizations fears immediate lose of jobs to over 80 lakh workers. I-T firms, most of whom are poised to face further loss, have warned the government against withdrawing the tax cuts. They fear the foreign clients will move to Philippines and Mauritius. In 2004, NDA’s ‘feel-good’ package was more substantial in content and thus less assailable. Hence the charge against the ‘shining India’ was that it was elitist and it meant nothing for the aam aadmi. As against this, the UPA’s proposed fare is much more vulnerable to attack. Its only strong point is the CMP-sponsored rural programmes.
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