Expert Speak India Matters
Published on Feb 19, 2016
Budget 2016: Will Modi take a Left turn?

It was cleverly thought out strategic imperative. A three pronged push to reach out to the masses ensconced at the bottom of the pyramid. A vote bank bigger than any other in India. The creation of a welfare state emerging out Sonia Gandhi's European sensibilities envisioning a strong pro poor approach to create a safety net for agrarian India. All to plug and play into a segment which was to reward the Congress amply in the 2009 polls.

It began with employment guarantee scheme MGNREGA, was provided the necessary ballast with the farm loan waiver only to be finally rounded off by the tough Forest Rights Act protecting forest dwellers and forests themselves.

Just as MGNREGA was at the vanguard of dole economics, the Forest Rights Act was a significant impacter. Millions of people live in and near India's forest lands, but have no legal right to their homes, lands or livelihoods.  A few government officials have all power over forests and forest dwellers. The result? Both forests and people die.  FRA recognised forest dwellers' rights and made conservation more accountable. Niyamgiri was a rude and brutal example of the Congress approach while dealing with displacement due to industrialisation. Tribal rights overrode thousands of crores of Vedanta investment.

With populism being the Congress's strongest suite, the third prong was the one time gargantuan agricultural credit waiver - Agricultural Debt Waiver and Debt Relief Scheme, 2008 - which proved to be the biggest vote catcher. As much as Rs 71,400 crore was doled out to the four  crore strong indebted farming community by waiving loans of small and marginal farmers.

There was a fourth leg to this stool - Land Acquisition Act - and the relief and rehabilitation attached to displacement which was in the works for long but could only fructify on January 1, 2014, but by then it was too late for the termite of cronyism and corruption had eaten the innards of the two UPA dispensations. The first three game changing policy decisions stood UPA 1 in good stead for it brought them back to power with a resounding 206 seats. Between 2006 and 2016, when MGNREGA completed a decade, as much as Rs 313,000 crore has been disbursed.

For a major part, this dole failed to build any sort of capital asset and was riddled with slippages, leakages not to forget complaints about rampant ingenious methods of corruption. Nevertheless, these three policy decisions convinced the Congress party leadership, in the e main Sonia Gandhi that you cannot go wrong if you pander to the poor, under privileged and downtrodden. The quiver had other arrows too, its genuflection before minorities and their constant appeasement also worked in their favour.

The second term of the UPA exposed its dark underbelly. A Finance Minister who had earned his laurels driving out license Raj was now found presiding over a Government that had been busy bringing back the license permit raj through the back door in the garb of discretionary and preferential allotment of natural national resources like spectrum and coal blocks.

The people saw a fabric of unprecedented crony capitalism where limpets thrived. Ministries were treated like ATM machines - roads and highways, telecom, railways - were emasculated brazenly. The 2010 Commonwealth Games – only seemed to have bequeathed several monuments to such cronyism to the country’s Capital.

That is what ultimately cost it the 2014 election.

The Hindu vote consolidated behind Narender Modi working in conjunction with the double anti incumbency resulted in the Congress being routed and reduced to 44 seats in the Lok Sabha. It was a telling blow delivered by the people of India.

In effect, it is the chickens of 2008-09 have come home to roost now as public sector bank balance sheets reveal the extent of stressed and ever greened assets. RBI Governor Raghuram Rajan has described this populism of furthering and extending as downright shocking. In fact, Government auditor CAG had found in several cases that ineligible farmers were given benefit while deserving were left out, pointing to large-scale possibility of fraud.

All the gains of MGNREGA, FRA and farm loan waiver had been frittered away by the UPA’s catalogue of high profile scams. The peeved and angry middle class hankering for change, got what it wanted in 2014.

Modi promised change, he argued for growth and development, he protested against corruption, he altered the caste and religious arithmetic with his victory. Perhaps for the first time since Indira Gandhi, an individual rather than a party polled the votes. It was Modi's win, not the BJP's. He campaigned tirelessly and assiduously. He was the outsider wanting to get into the inside track of Indian polity. People asked how and where he would get the votes from. As it happened UP, Bihar, Delhi, Rajasthan, Gujarat, Madhya Pradesh, Jharkhand, Chattisgarh and Karnataka voted for him in bulk. He appeared to be steroid charged as he sashayed his way to 7RCR.

< data-term="goog_2116222513">Twenty months later, has Modi taken a hard left turn? After describing MGNREGA last year as the living monument of UPA's failure, on the tenth anniversary of MGNREGA recently the Modi Government hailed the flagship rural job guarantee scheme saying the achievements of a decade are a "cause of "national pride and celebration". In a statement, the government also claimed that the last financial year saw a "revival" of the programme and announced that the focus in upcoming years will be towards simplifying and strengthening the procedures of the scheme and towards building sustainable assets to benefit the poor. Just as Sonia Gandhi took the high road to populism in 2008 with her trinity of schemes targeting the base of the pyramid, is a chastened Modi now choosing the same road to perdition?

This is a volte face of epic proportions for last year during the budget session, PM modi had asked sardonically why he would not put an end to the scheme? He had argued that while it was living monument to the Congress's failure in tackling poverty for 60 years.

SO with this budget Modi would with song, dance and drum beat continue the scheme. It is now an inescapable reality that cannot be ignored. Right, centre or left, the path to the Indian voter is paved with pro poor socialist policies. The merits of the Sonia model seem to have finally dawned - to be replicated in the months and years to come for elections cannot be won by pursuing second generation structural reforms.

Continuing rural distress is a cause for concern and its impact on the frail economy is perceptible. Indications are that money saved from the downswing in crude oil prices will be re-directed towards reviving the rural economy - irrigation and infrastructure being its twin pillars. Health which has been ignored by the NDA will also find a fresh ballast of cash. Add long term capital gains tax, another two per cent increase in service tax rate(from 14 to 16 per cent across the board)  and perhaps even dividend distribution tax, then you have a middle class which will be under the cosh.

 Maybe it is time to make a run for the lifeboats. For politics seems to have trumped economics yet again.

The author is a senior journalist and commentator based in New Delhi.

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