Welcome UPA, without illusions

Print edition : June 18, 2004

The installation of the new government marks a positive break from a vicious phase in Indian politics. But the United Progressive Alliance will have to strive hard against its adversaries within to translate the people's mandate into real action.

AS I write this, barely 10 days after the swearing in of Manmohan Singh as Prime Minister, three broad trends are discernible. First, the United Progressive Alliance (UPA) government is already under intense pressure from the Right to adopt a conservative stance not in keeping with the electoral mandate. Second, it has negotiated, not least because of the Left parties, a centrist "social market economy"-oriented Common Minimum Programme, although not without compromises, ambiguities and flaws. And third, the Council of Ministers is a mixed bag. Some key portfolios have been allotted to leaders either lacking in dynamism or with a distinctly pro-business disposition and a Right-leaning orientation.

The government's top leaders will face heavy odds in translating the electoral mandate into policies, which can inflict a decisive defeat on the socially retrograde forces represented by the Bharatiya Janata Party and its allies. Such a defeat is today's categorical imperative. All secular public-spirited citizens must welcome the UPA, but they should have no illusion that the alliance will deliver - unless progressive parties and people's movements mount moral pressure on it.

Of the three trends, the first became manifest even as the election results were coming in. The Sensex lost 200 points and then another 800 - a warning, the pink press declared, of the mood of the "investing community" which apprehended that the NDA's policies would be reversed. It now turns out that the stock crisis was exaggerated and made out to be unique to India, when in reality Asia's major "emerging markets" - China-Hong Kong, South Korea and Taiwan, besides India - saw share values decline by a huge 15 per cent-plus in two weeks.

This was largely due to foreign portfolio investors pulling out a chunk of the $500 billion-plus they had invested in the region over preceding two years - wing to high oil prices, fear of inflation and an upturn in the U.S. economy, which has gained 900,000 jobs in four months. Evidence suggests the Indian markets were rigged in order to solicit pro-business signals from the new government and influence key appointments.

Sections of the media luridly played up the "bloodbath" and how it destroyed tens of thousands of crores in share value. On May 18-19, they launched a campaign of disinformation alleging that Sonia Gandhi had decided to turn down the prime ministership because the President advised her to do so or questioned the legality of her naturalisation as an Indian under the Citizenship Act. Since then, they have relentlessly poured scorn on the UPA's effort to formulate the CMP, and on its contents, branding it the "Crash Markets Programme". They have painted the UPA's coalition-building process in dark hues.

The central thrust of this media campaign, with all its inaccurate or unchecked allegations and unsolicited editorial advice to Manmohan Singh - interestingly, this was rarely offered to NDA leaders - has been to construct elaborate apologia for neo-liberalism and for the perpetuation of the obnoxious Prevention of Terrorism Act (POTA). Equally, it is to legitimise the BJP's ludicrous claim to be the "natural" party of governance and India's best candidate for coalition-building. In fact, the UPA enjoys the support of 320-plus Lok Sabha members, a number the NDA could never reach despite all manner of compromises and inducements to allies. Some of the media campaign has apparently had an effect, especially as regards appointments to some key Ministries.

The second trend - negotiation and finalisation of the CMP - in many ways represents the opposite process. The UPA by and large stood up to pressure from the pro-neo-liberal media and business groups. The CMP is undoubtedly a compromise document. Its final version differs significantly from the original draft on issues such as employment, labour, foreign investment, electricity, foreign policy, and defence and security. The differences are largely attributable to the suggestions made by the Left parties.

The "six basic principles of governance" are unexceptionable within the context of today's largely forward-looking, Left-leaning, secular dispensation. They emphasise "social harmony" and enforcement of the law "to deal with all obscurantist and fundamentalist elements"; sustained 7-8 percent economic growth "in a manner that generates employment so that each family is assured of a safe and viable livelihood"; "welfare and well-being of farmers, farm labour and workers, particularly those in the unorganised sector"; and empowerment of women - "politically, educationally, economically and legally"; and "full equality of opportunity, particularly in education and employment for the Scheduled Castes, Scheduled Tribes, OBCs [Other Backward Classes] and religious minorities". The sixth principle is about unleashing "the creative energies of our entrepreneurs, businessmen, scientists, engineers and all other professionals and productive forces of society".

These together mark a definite improvement over the Congress party's election manifesto. The UPA has taken to heart the salience of unemployment associated with the current pattern of growth and placed it on top of the agenda. It promises to "immediately enact a National Employment Guarantee Act. This will provide a legal guarantee for at least 100 days of employment, to begin with, on asset-creating public works programmes every year at minimum wages for at least one able-bodied person in every rural, urban poor and lower-middle class household. In the interim, a massive food-for-work programme will be started". Agriculture, education and health also figure prominently in the CMP. As do schemes for Dalits and Adivasis, and women.

A particularly healthy part of the CMP is the emphasis on regional development, and redressing growing imbalances, between and within states, "through fiscal, administrative, investment and other means". On the agenda are debt relief, special programme for social and physical infrastructure development in the poorest districts, and transfer of all centrally-sponsored schemes (except in "priority areas like family planning") to the States. Also welcome, despite its slow pace, is the commitment to eliminating the Centre's revenue deficit by 2009, so as to release "more resources for the social and physical infrastructure".

Reassuringly, the CMP does not go ga-ga over the river-linking proposal so mindlessly peddled by the NDA. It only promises "a comprehensive assessment of the feasibility of linking of the rivers... This assessment will be done in a fully consultative manner... " The CMP promises "steps to ensure that long-pending inter-State disputes on rivers and water-sharing like the Cauvery waters dispute are settled amicably at the earliest".

Having said this, ambivalences, inadequacies and flaws do remain. For instance, to achieve food security, India badly needs to universalise the Public Distribution System, in place of "targeting", which has very nearly destroyed the PDS for the poor. Yet, the CMP only says: "UPA will work out, in the next three months, a comprehensive medium-term strategy for food and nutrition security. The objective will be to move towards universal food security over time, if found feasible (emphasis added)". Yet, the central issue is not feasibility, but the will.

Again, the CMP does not rule out privatisation of profit-making public sector companies: "generally", they will not be privatised. The promise is to retain "the existing `navaratna' companies, while these companies raise resources from the capital market. While every effort will be made to modernise and restructure sick public sector companies and revive sick industry, chronically loss-making companies will either be sold off or closed after all workers have got their "legitimate dues and compensation". One can read some formulations as offering a justification for privatisation - for instance, that "the UPA government believes that privatisation should increase competition, not decrease it". Also that, "there must be a direct link between privatisation and social needs - like, for example, the use of privatisation revenues for designated social sector schemes".

In the conclusion of the economic section, the CMP reiterates its "abiding commitment to economic reforms with a human face, that stimulates growth, investment and employment. Further reforms ... will be carried out in agriculture, industry and services. The UPA's economic reforms will be oriented primarily to spreading and deepening rural prosperity, to significantly improving the quality of public systems and delivery of public services to bring about a visible and tangible difference in the quality of life of ordinary citizens ... ". Since this does not specify what is meant by "reforms", one can only take it to connote neo-liberal policy changes, albeit with "a human face" - a classic World Bank-International Monetary Fund formulation. There is no mention of equity and equality in the CMP, although "growth", "investment" and "employment" are repeatedly stressed.

The broad point is there is no commitment in the CMP to dismantling the macro-economic structure of neo-liberal policies, not even to progressive taxation with which to rectify imbalances in the government's finances.

The CMP takes a step backwards as regards India's nuclear policy. It ignores the Left's opposition to the 1998 nuclear tests and to plans to make and deploy nuclear weapons. It says the government is "committed to maintaining a credible nuclear weapons programme while at the same time it will evolve demonstrable and verifiable confidence-building measures with its nuclear neighbours. It will take a leadership role in promoting universal nuclear disarmament and working for a nuclear weapons-free world". This is definitely a retrograde departure even from the Congress' reiteration of a commitment to the Rajiv Gandhi plan of 1988 for global disarmament.

The CMP promises "an independent foreign policy, keeping in mind its past traditions. This policy will seek to promote multi-polarity in world relations and oppose all attempts at unilateralism". There is a welcome effort to play down India's recent proximity with the United States and no mention of "strategic partnership": "Even as it pursues closer engagements and relations with the U.S., the UPA government will maintain the independence of India's foreign policy position on all regional and global issues. The UPA is committed to deepening ties with Russia and Europe". The emphasis on the South Asian region too is welcome. What this will mean in practice remains to be seen. On the World Trade Organisation, there is no mention of the urgent need to protect services, in addition to agriculture and industry.

On the whole, the CMP is a reasonably good broad framework, whose ultimate test will lie in actual policy-making and implementation. The government must be held accountable on its commitments in favour of the people.

Unlike the CMP process, government formation has been messy and driven by exigencies. Some major appointments remain unsatisfactory. Among the positive ones are those of Natwar Singh (External Affairs), Arjun Singh (Human Resource Development), S. Jaipal Reddy (Information and Broadcasting), Mani Shankar Aiyar (Petroleum and Panchayati Raj) and Prithviraj Chavan (Minister of State in the PMO). However, the downside is strong too. Take three key portfolios: P. Chidambaram (Finance), Pranab Mukherjee (Defence) and Shivraj Patil (Home). Chidambaram is an ideologically driven neo-liberal who, like many other Harvard Business School graduates, remains dedicated to "free-market" doctrines. Manmohan Singh by contrast is no "free-market" zealot. He opposes dismantling of the public sector "for ideological reasons".

Neither Mukherjee nor Shivraj Patil can be accused of being imaginative or firm in adhering to principle. That is sorely needed today in Defence, which cries out for streamlining, deep cuts in wasteful budges and action against corruption. Similarly, Home holds the key to bringing the culprits of the Babri Masjid demolition to book, to resolving the Ayodhya dispute, abolishing POTA, and outlawing Togadia-style hate-speech and VHP-Bajrang Dal-style hate-acts. Similarly, Kamal Nath (Commerce) inspires no confidence whatsoever. The Minister will be called upon to play a crucial role in the coming round of WTO negotiations in which India's stand, like that of Brazil and South Africa, as well as the least developed countries', will matter. At stake is unrestricted trade in services, which will be disastrous for the Third World.

Equally disturbing is J.N. Dixit's appointment as National Security Adviser. Dixit's role during the Indian Peace-Keeping Force period in Sri Lanka was embarrassing. He is a known hardliner on the nuclear issue, and on relations with Pakistan. In the early 1990s, as Foreign Secretary, he gave hawks a free run in determining India's nuclear policy. Since 1998, he has openly advocated nuclearisation. He was singularly responsible for removing any reference to the Rajiv Gandhi plan from the Congress manifesto and for committing the party for the first time to "a credible nuclear weapons programme" - without debate or discussion. This composition does not suggest a great beginning. The UPA will have to do better than give the impression that it might soon drift towards conservativism.

A letter from the Editor


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