OPED | Saturday, March 6, 2010 | Email | Print |  | Back
The prince of inequity
Udayan Namboodiri
Never before, to paraphrase Churchill, has so much been owned by so few. As he battled post-Budget blues this week, Manmohan Singh defended the post-1991 privilegocracy’s right to a disproportionate share of India’s ‘growth’ story
What was that he said on the plane back from Riyadh on the petrol/diesel price hike? “We cannot save people from inflation if we follow all along populist fiscal policies”.
Lowering direct taxes for the upper end of the Rs 5-8 lakh per annum earning class so that housing finance corporates could tap them better is to the Prime Minister of India “saving” the people. But protecting the already depleted nutrition intakes of vast masses of Indians affected by a food prices trajectory that has been perennially northward since mid-2008 is ‘populism.’
A famous queen of France was so innocent to the reality of her times that (legend has it) she suggested her hungry subjects ate cakes because bread was dear. Manmohan Singh, would you believe it, marshaled all the economics funda at his command to defend the petrol/diesel price hike saying “the effect on the Wholesale Price Index will be only 0.4 per cent.”
We must celebrate our good fortune in having a Prime Minister who can accurately predict what the WPI would be like in six months. Now that’s some feat considering the Reserve Bank’s proven incompetence at the forecasting game. For about a decade now, its projections on everything from GDP growth to inflation has been way off the mark. But Singh, after delivering a figure down to the last fraction of a percentage point, has packed in a sub-text:you don’t have a Ph.D in economics/finance, so shut up.
It’s good to see Opposition unity, finally. Even sectors within the UPA are having conscience pangs over backing a government so insensitive to the tears and fears of the non-rich. But what usually happens at such times is that politicians abandon the larger political economy just as soon as the government hands them the low hanging fruit. Qualitatively our politicians come too shallow or stupid (often both) to sustain a struggle that would question the general direction that the economy is being given by a regime obedient to the Washington Consensus. If Dr Singh is smart enough to announce a rollback on the price hike, there will surely be a dissipation of the energies released by Pranab Mukherjee’s shocking announcement of February 26.
Mercifully that is not likely to happen. While that means more hardship for the aam admi, the silver lining could be the revivification of long-forgotten slogans for economic justice. Since 1991, when Dr Singh, in his earlier avatar as Finance Minister unfurled neo-liberalism as the magic bullet panacea for India’s economic ills, it has been unfashionable, even treasonable, to recall that the Directive Principles of State Policy, contained in Part IV of the Constitution of India, had explicitly mentioned that there should be no concentration of wealth in a few hands. The exact words are: “The State shall strive to promote the welfare of the people by promoting a social order in which social, economic and political justice is informed in all institutions of life. The State shall work towards reducing economic inequality as well as inequalities in status and opportunities, not only among individuals, but also among groups of people residing in different areas or engaged in different vocations. The State shall aim for securing right to an adequate means of livelihood for all citizens…both men and women as well as equal pay for equal work…the State shall work to prevent concentration of wealth and means of production in a few hands, and try to ensure that ownership and control of the material resources is distributed to best serve the common good.”
Manmohanomics is synonymous with the trickle down aphorism “growth fuels prosperity”, and this much-celebrated ‘growth’ has been restricted to very much the same lot of Indians who were anyway benefiting from pre-reforms protectionism. He is the leader of the privilegocracy of both systems — phoney socialism as well as market capitalism. To Dr Singh’s utter delight, most Indians today are too young to know that he oversaw the very worst of control-raj that preceded the 1991 collapse which, Voilà! he held up as justification for enforcing the Bank-Fund prescription. Singh had held every important economic office — Prime Minister’s economic adviser, RBI governor to Deputy Chairman of the Planning Commission — before the denouement of 1991 when the government was literally forced to pawn off the country’s gold to pay for a few weeks’ imports.
Also good for him is the fact that few Indians are aware that the trickle-down rationale has been disowned by one of its earliest champions (Norman Lamont, the treasury first secretary under Margaret Thatcher) who famously admitted years afterwards that ‘trickle down’ means only crumbs from the tables of the rich. But Dr Singh has persisted with it in Budget 2011, packaged, of course, with old-fashioned Congress doublespeak.
For manifestation, consider the 2 per cent excise hike on SUVs. We are expected to believe it would make any difference to the super-rich who go in for these tanks. Even if manufacturers pass on the ‘burden’, it would work out to just Rs 5,000 at the upper limit. The size of the SUV market (2 per cent of total automobile) is nothing to wish away; there are already 20 models on the road priced between Rs 8.5 lakh and Rs 42 lakh. To a government apparently keen on raising revenue, this segment should have been a logical choice because, after all, India today is home to more dollar billionaires than Germany, Britain and Japan. Even if a flat-out Rs 1 lakh increase was announced on SUVs, the difference to annual sales would be negligible.
But no, he chose to hit the poor. Preserving them from further misery is ‘populism’ to India’s longest-serving non-Nehru Prime Minister. And how much further ruination would have resulted from a few more calories in the bloodstream of our mostly youthful population? Is the great economist listening?
Today, the gap between the top 5 per cent and bottom 80 per cent of Indians has touched scandalous proportions. Naturally, as the man who has shaped India’s economy for the major part of the past two decades Dr Singh must bear the cross. When the Arjun Sengupta Committee, which he formed under pressure from the Left in the early days of UPA-1, reported that over 394.9 million workers, who make up 85 per cent of the working population, live on incomes of less than Rs 20 a day and that 88 per cent of the SC-ST-OBC and 85 per cent of Muslims make do with not even that, one had hoped that Singh would chart a truly inclusive course. But ‘inclusivism’ is like the original Congress bad-joke: “Garibi Hatao”—it boiled down to Garib Hatao.
In Budget 2011, five years since that report was tabled, we see the government allocating a measly Rs 1,000 crore for the welfare of unorganised sector workers. Divided up equally between 28 states and three union territories, it translates into about Rs 32 crore each, less delivery costs. A drop in the ocean? No, a sick joke.
In 2009, the Indian Statistical Institute reported that that since 2004-05, Singh’s first year as Prime Minister, rural poverty has grown 20 per cent. Yet, the cheerleaders of neo-liberal economics would encourage us to take pride in the fact that we are now the world’s fastest growing economy. But wasn’t Mughal India the world’s biggest economy too ? What did that matter to the flesh and blood Indian?
Those who don’t read history are condemned to repeat it.
--The writer is Senior Editor, The Pioneer
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