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Mainstream, VOL LII, No 25, June 14, 2014

The Political Economy of Change

Saturday 14 June 2014, by Uttam Sen

When a supposition or a system of ideas is being put in place, there is no choice but to debate the exceptionable or the inscrutable through available channels. The nuanced differentiation of an evolved milieu comes to light in the public sphere. The hardboiled rule out the catalysts of change moving to a different opinion, but to the extent that any modification is a process, the possibilities for better or worse exist at the same time. For instance, if the case is for clearing away the cobwebs created by perceived “policy paralysis”, the transformation would depend on the nature of the disorder and the agency for settling it. Whether the pressures that thwarted movement were the proverbial checks and balances that sustain democracy or simply a tussle for the loaves and fishes will be known in the fullness of time. But circumstances could restructure attitudes on either side.

Streamlining governance, increasing trans-parence and accountability, setting tangible benchmarks and so on are unequivocally laudable. They have been welcomed by objective opinion. The hope is more that it will be sustained rather than collapse. We have been set wise to the urgency of a holistic macro-economic plan with high public investment in the rural areas where infrastructure is needed most and which at the same time has the potential of creating more jobs than with urban investment. Global factors have made foreign investment unpredictable and domestic private investment is constrained by failing business confidence in the wake of the scams. The hope in the national interest is that the government will be persistent and come to terms through practice with the axiomatic truths on which India straddled a bipolar world (now back in the reckoning).

Top experts, particularly economists, are arguing that there has been an administrative collapse. But can it be restored by the Centre alone?

Going by the book, apart from food inflation, reversible by sheer administrative efficiency in supply and distribution, to include dehoarding operations, the path towards correction is the revitalisation of the States. Delhi has a say in Centrally-sponsored schemes from a distance. But the red flag item of infrastructure, parti-cularly roads and electricity, or for that matter, social security, is located in the States. The prescription offered is greater decentralisation and devolution to energise these State units, often as large as the European nation-states, along with smooth land acquisition and enforcement.

Yet the BJP-NDA’s billing is at best modest in this sphere. In BJP-governed States, the indices of manufacturing and employment are less favourable than in non-BJP States. The remedy is to facilitate the small and medium sector where the bulk of employment growth is situated. But will that happen? Or will the “stick” have to be applied? Leading political figures who have just acquired a trailblazing majority at the Centre would know better than to fritter it away for short-term gain. On the other hand, by winning the Assembly elections, the BJP is looking at increasing its tally to a majority by 2015. In the interim, it is nibbling away the numbers in the Rajya Sabha (at present 44 out of 250) with “issue-based” non-BJP parties’ support, for example, from the AIADMK. It hopes to muster a majority for important legislation.

The long-term goal of a strong Centre with the States as pocket boroughs does not have encouraging precedents, but it could be a little different if and when the Centre readily devolves powers to States where it is in power. The BJP would be aware that the Constituent Assembly had reposed residuary federal powers in the Centre, meant for the States, owing to the “exigencies of the moment”, which have surely passed. But by the time the deed is done the doers could be undone, to paraphrase a famous literary line. Immediately after independence an arrangement of that sort did emerge, but it unravelled with the “high command” of the ruling party diminishing the budding satraps. The alternative would have been for powerful States to off-set the Centre.

So far the Prime Minister himself has displayed breadth of mind and vision beyond the nation-state by inviting the SAARC leaders to his swearing-in (there are, doubtless, other ways of looking at it!). The subcontinent is politically a heterogeneous entity of several sovereign States, but comprises a common eco-system, managing which would entail recognition of diversity within discrete entities. Again, it did not happen in the past when the concentration of power at the Centre generated a big brother attitude that spilled over into the neighbour-hood. The BJP’s predecessors grew as part of the angst against the Congress’ domination, another side of which coin was centralisation (and its corollaries, that included socio-economic “elitism”). How it consolidates under inverse credentials remains to be seen and would have been manifestly untenable but for its alliance with a corporate sector that virtually did the unthinkable in the just-concluded elections. For all practical purposes the jury is still out.

After all, it is not just in far-away Bolivia that vicissitude struck in the past (the country made large-scale transfers of government assets to business and then recanted in the face of a groundswell that necessitated re-nationali-sation). In West Bengal the Left rose from the ashes in the seventies to rule for 34 years. There are several factors, including the lack of immediate governance and the alienation of the common man, in a hostile, impecunious environ-ment, that eventually removed it. The BJP promises to govern and assimilate one and all with the benefit of unprecedented resources (some already available, others reportedly in the pipeline through high market sentiment and global investment). Deep pockets could, however, be deceptive as global fluctuations and domestic business confidence have demonstrated.

At the same time, another vista is opening up. Modi’s reported assurance to the Bangladesh Speaker, who was filling the shoes for her Prime Minister, that he would take another look at the Teesta waters issue, was a recognition of the natural and mutual inter-dependence of people. The lady reassured her interlocutor on one of our public service broadcasting channels that Modi had not raised the subject of illegal migration. The gesture could be variously interpreted. One is that having acquired the majority the Prime Minister is adopting the idiom of enlightened good neigbourliness. Also implicit in some of the Bangladeshi emissary’s statements was the necessity of seeing the big picture, in which the SAARC nations had a common stake.

Similarly Nawaz Sharif did not unduly cross his hosts. An opinion piece by a seemingly definitive Pakistani journalist soon after suggested that the Army was less and less the arbiter of the country’s destiny. Nawaz Sharif’s presence as the non-military civilian emblem of the Pakistani identity was therefore significant in its own way, but still contingent on another aspect. Fundamentalist members and sympa-thisers in the ruling party and government have resisted the Most Favoured Nation status in trade to India. As influential opinion often suggests, such trends are reminders of the need for enduring remedies which cannot be wholly isolated from the regional political environment. Yet Hamid Karzai appeared to almost counter-poise Sharif’s low-key diplomacy by openly laying the blame on the Herat Indian Consulate’s blast at the LeT’s door. (It was reliably attributed to blessings from the usual quarters.) The Indian Foreign Secretary later met both the other contenders for the Presidency, broadening the scope of future reference considerably.

On the less explosive side of things, for the people of the country’s eastern region a substantive rather than cosmetic approach can mean much. The restoration of traditional inland waterways for transport and business, or transit through Bangladesh to the North-East, would reduce time and cost overruns appre-ciably. The case for a socio-economic revival of the eastern region through a holistic approach is a very strong one and been denied to the people for a long time (since partition and the redrawing of boundaries disturbed the preva-lent zeitgeist).

The seemingly endless conundrum can stretch and touch vital aspects of regional economy hitherto obfuscated by a political, often emotional, smokescreen. One has heard from Assamese friends of their trauma in 1962, when they felt betrayed and left to the wolves (the beginning, they say, of the extremist-autonomy frame of mind). China holds the key to the upper reaches of the Brahmaputra that flows through its territory. A revaluation of bilateral relations in the light of an encounter that is being re-visited could clear the path for a perspective in which we, just as much as the people in Bangladesh, would gain a fresh lease of life. On the face of it, tackling a subject like insurgency in the North-East with one eye on external relations, as the distribution of ministerial portfolios suggests, could be richly rewarding if history and the human condition are also given proportionate priority. At the end of the day the benchmarks could be security and stability. As it happens, mischief-makers have created a fearsome mess that calls for information gathering and professional hand-ling. But getting across also assumes dimensions that the colonial legacy blithely dumped. Though still treated like cannon fodder the marginalised people (in Bangladesh, the North-East and West Bengal’s borders) are the true inheritors of rich natural resources monopo-lized by vested interests with long arms.

Fishing in troubled waters could decline considerably with rapid global developments which include the discovery of new sources of energy and its cascading geo-political effect. To take one example, shale oil could make the US self-sufficient in energy, disinclined to a Persian Gulf presence and patronage of rich client States associated with the export of fundamentalist terror, which has now reached the eastern region; alongside, the Sino-Russian energy détente with its political and military implications and over-lapping relationship with BRICS, of which India is a member, could restore global bipolarity, more likely multipolarity, with the US and Western Europe as independent factors.

An imaginative response from India could lead to several solutions, namely, functionally aligning the North-East with West Bengal and Bangladesh, also to benefit other eastern States, by making a virtue of give and take. The region is also the portal to South-East and East Asia, where established Indian statesmanship in getting along with a diversity of persuasions at home and abroad can pay off. The bare bones of buying and selling may not be all. As the dominant factor China has both its fears and aspirations and India has traditionally treaded cautiously, but as some commentators are suggesting, the time is ripe for re-establishing mutual affinity, transcending ideology. A glim-pse of that was seen in Vajpayee’s time. China’s unnoticed but delicate handling of the Japanese Emperor’s visit to India, as well as the resilience of the Sino-Japanese relationship, are in truth noteworthy, arguably antecedent to the idea of interdependence. But there is always an elephant in the room, and both the Indian and Chinese leaderships have to appear robust and implacable to select audiences.

Some are hailing Modi as India’s Deng Xiaoping who turned China’s trajectory from ideology to growth. He got things done, as Modi was known to do in Gujarat. A federal Indian Centre could be somewhat different, even if as a former Chief Minister, Modi is bent on generating a serviceable functional structure. There are also known economic issues which are not about federal functioning per se although they will affect the pattern of growth.

But the system’s native diversity is such that a fiercely nationalistic Prime Minister would be wise to the perniciousness of a federal straitjacket in which the mélange of the past is overlooked. The eastern region, for instance, presents its set of circumstances, as do the others in the south, north, or west, but could be disposing its own panacea through the reclamation of opportunities the here and now is furnishing. An assertive middle class is setting the pace the world over. Profound change could affect governance, arguably assist it, by means of changing terms of engagement (whether with trade or terrorism, traditional and labour-intensive modalities of income and employment, or even modern finance). Resource mobilisation may not pose the problem of overstating one or another controversial reserve if others present themselves.

The facts or conditions for reorganising settled ways of thinking can get more striking with time. If the antidote for policy paralysis turns out to be more of the same strategy, a democratic national disposition would again cast about for innovation.

But on most of the aforesaid, the BJP’s agenda is less exceptional to the world at large than among those who have been described as minority special interest groups. Manufacturing, and the infrastructure with which to further it, are critical to India’s emergence. The window of opportunity through cheap, semi-skilled or even unskilled labour will begin to disappear as in China with rising labour costs, yet while it lasts, it can pave the way for the use of technology to enable mass production inter alia as the facilitator of universal provisioning.

The interest groups valiantly projecting the smaller vulnerable number of people (like workers and peasants) are perceived to be those that make labour discipline unenforceable or acquisition of land difficult. Both categories of people are precious to the country’s heritage. They either directly represent, originate or are in transition from traditional economies that will hopefully converge rather than collide with industrial society. (The advice to revive the handloom sector, labour-intensive yet in demand for exports, is an example of a lateral idea that can save the day.)

The uncelebrated imagination of Indian democracy can help refurbish labour laws (e.g. hire and fire but compensate at contemporary rates) and land acquisitions (e.g. update colonial clauses and provide adequately for the affected) in both democratic and functional terms. Public investment in the rural sector would make both more manageable. Recent movements would not have gone in vain if their workable principles are factored into operational policy. Good leader-ship and management would try to temper our ingrained winner-takes-all mentality. Activists and politicians tend to grind industry to a halt with their flamboyant expectations during a Socialist surge, while rich individuals and companies are ready to throw the most hapless opposition to the wolves when their turn comes.

Likewise, the cushioning of special interest group (the variously disadvantaged) subsidies, following detailed examination, can serve the ends of justice and growth, reducing expenditure and expediting delivery of goods and services. The cases for and against both the traditionally deprived (on the flip side, lobbying and political manipulation on behalf of a few, sometimes not even the publicised targeted groups) and efficient management of resources (lobbying to concen-trate power and influence for a handful) are well-known and can be sorted out by political will. But exceptions are warranted. A project like the Public Distribution System, which, according to reliable surveys, is beneficial to the vast majority of people, should not be shelved.

Proficiency in these spheres can give public policy the momentum for a genuine national endorsement (well beyond 31 per cent!) and subsequent achievement. It might just happen with technocracy, bureaucracy and expert/specialised advice appropriately rendered, a possibility mooted on the grapevine. If the plight of habitually neglected regions is also addressed, the aims and objectives of significant minority special interest groups, vital to a democracy, could actually be co-opted. Interestingly, members of traditional systems or economies which never thoroughly blended with the colonial/post-colonial metropolitan ambience also share the characteristics of cultural denial, sometimes despite prosperity. Current political manifes-tations could be dispensing an unstated meeting of the two strands.

There must be a matching collective responsibility to realise the “man of the people”, from among aspiring popular representatives and activists generally, on the part of the people themselves. That trust, as long as the mandate lasts, should inform the altruistic response to the many cut-throat stratagems employed to defeat the purpose of representative democracy.

The author is a Bengaluru-based journalist.

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