Low on returns

Budget 2008 may not earn political dividends for the Congress, for economic sops have seldom saved ruling parties in India.

in New DelhiA hoarding in

IN November 2003, six months before the last Lok Sabha elections, the National Democratic Alliance (NDA) government led by the Bharatiya Janata Party (BJP) released the Finance Ministrys mid-year economic review before tabling it in Parliament. The Fiscal Responsibility and Budget Management Act, 2003, makes it mandatory to table first in Parliament the Finance Ministrys economic reviews. But the NDA was gearing up for elections in May 2004 and the Atal Bihari Vajpayee-led ruling coalition was convinced that the publication of the review would help it in the election campaign.

For the economic review stated that Indias economy was on course to register a 7 per cent growth, that there was buoyancy in agricultural production with a projected growth of over 8 per cent in that sector, and that there was improvement even in the industrial sector. Along with the hasty publication of the economic review, the government also announced a pre-Budget sop of Rs.50,000 crore for agricultural infrastructure and an additional Rs.50,000 crore for infrastructure and manufacturing. All this was supposed to reinforce the India Shining election slogan.

But these economic policy pronouncements and initiatives did not bring electoral gains for the NDA. India Shining turned out to be the most paradoxical election slogan in the history of the country and the NDA was shown the door by the people. In many ways, the 2004 elections and the collapse of the NDAs overconfident campaign once again proved that the people have a way of seeing through the glib sloganeering political parties and their leaders evolve from time to time.

The question about the impact of economic policy initiatives and pronouncements on politics has come up once again in the context of the Congress-led United Progressive Alliance (UPA) governments Budget for 2008-09. The question, this time around, is focussed on the Rs.60,000-crore debt relief announced for farmers.

The Budget presented by Finance Minister P. Chidambaram has been termed by many as a political exercise with the specific objective of advancing the next Lok Sabha elections which are due in May 2009. Opposition leader Lal Krishna Advani, the prime ministerial candidate of the NDA, even branded the Budget a political hoax. Advani doubted whether the Budget had real allocations for the tall projects and pronouncements it presented. Other BJP leaders, such as Prakash Javadekar, asked rather feebly as to why the UPA was suddenly remembering the farmers after ignoring their plight for the past four years.

D. Raja, national secretary of the Communist Party of India (CPI), said the Budget focussed on short-term relief and lacked a long-term perspective. Raja was also of the view that the Budget gave sufficient indication that the direction in which the economic reforms were going was dangerous.

Prakash Karat, general secretary of the Communist Party of India (Marxist), pointed out that the Finance Ministers announcement of debt relief for farmers is a welcome but long overdue step. He added that the debt relief measures proposed are deficient in some aspects, since they would exclude the bulk of the small and marginal farmers.

Manohar Joshi, former Lok Sabha Speaker and a leader of the Shiv Sena, an ally of the BJP, admitted that the Budget did provide some relief to some sections of the population, but said this had happened obviously because the Congress was gearing up for early elections.

The Congress, on its part, responded with a hard-hitting speech by Prime Minister Manmohan Singh in Parliament, in which he virtually accused the NDA government of creating the economic mess that necessitated the kind of debt relief measures announced by Chidambaram. Whatever the ultimate result of this verbal duel, there is little doubt that Budget 2008 has heralded the electioneering phase for the next Lok Sabha elections.

The consensus among most political observers as well as activists of different parties is that the Congress and the UPA have indeed scored some political points in the immediate aftermath of the Budget. The responses of leaders of the BJP and its partners in the NDA clearly revealed that they had been caught off guard by the Budgets people friendly projections and pronouncements.

Chidambarams own reaction to critics of the Budget also underscored the dichotomous streak in the position taken by many opposition parties. In his comments to the media after the presentation of the Budget, he said: You cannot ask for a scheme of relief to the farmer until Thursday and then on Saturday crib about what has been done or try to find fault in what has been done. You ought to stand up and be counted. We have done this for the farmer consciously, deliberately and with full knowledge about the consequences and the burden. Naturally, the opposition parties went on the back foot in their response to the Budget. One of the reasons for this, said political analyst Hariraj Singh Tyagi, was that almost all the opposition parties had been demanding a waiver on farmer loans. In all probability, the demands were made with an understanding that the state of the economy does not allow such a large-scale waiver. The opposition must have naturally calculated that the UPA was not in a position to do this and that this could become a good campaign issue. But as things stand now, the Congress and the UPA have out-manoeuvred the opposition, Tyagi told Frontline.

But does this outmanoeuvring by itself ensure a steadfast political gain that can be converted into electoral victory? The answer to this question, especially in the background of the experience of political parties in past elections, is not a promising one for the Congress and the UPA.

Pronouncements and initiatives on economic policy have preceded many an election and more often than not they have failed to help ruling parties. The last example of this was in 2004 when the BJP and the NDA tried to project the India Shining slogan through the tactical release of the economic review and the announcement of the agricultural infrastructure fund. As it ultimately turned out, the actual outlay for the agricultural infrastructure fund was approximately Rs.1,200 crore, which amounted to about 2.4 per cent of the original projection. Chidambarams announcement of the Rs.60,000-crore waiver of farmers debts could also end up having a boomerang effect if the actual allocations and deployment of funds do not match the pronouncement.

Manmohan Singh, who came up with a spirited defence of Chidambarams Budget in Parliament, had himself faced reverses when he took on an election on the basis of the gains in the economy through policies he had piloted. This was in the 1996 Lok Sabha elections, which the Congress fought under the leadership of Prime Minister P.V. Narasimha Rao.

Throughout the campaign the Congress took credit for reviving the economy through the neoliberal reforms initiated since 1991 by Finance Minister Manmohan Singh. The campaign pitch was that the Singh-Rao duo had lifted the country out of bankruptcy. However, all this failed to enthuse the voter.

When the election results came out, the Congress had lost nearly 100 seats. The partys tally of 232 seats in 1991 had been brought down to 140. The 1996 elections were essentially marked by the use of Hindutva politics by the BJP, although the right-wing party failed to gain power in that round. The Congress was forced to support a Third Front formation led by the Janata Dal and help H.D. Deve Gowda become Prime Minister.

Leaders of parties other than the Congress and the BJP too have had to face reverses when they built up a campaign based on economic policy initiatives and gains. The failure of the Mulayam Singh Yadav-led Samajwadi Party (S.P.) government in Uttar Pradesh in the May 2007 Assembly elections is a case in point.

The S.P. had built its campaign on the measures it had taken to promote the interests of farmers, especially sugarcane growers, and its populist programmes such as the Kanya Vidya Dhan (educational fund for girls) and the unemployment dole. But all this was to no avail as the Dalit-Brahmin socio-political combination that the Bahujan Samaj Party (BSP) forged and disgust with the declining law and order situation led to the S.P.s defeat.

The experience of the Congress in 1996 and of the S.P. in 2006 indicate that emotive issues relating to caste and communal identities have greater sway among the electorate than core economic policy issues.

Perhaps, the CPI(M)-led Left Fronts in West Bengal and Tripura have provided the singular instances of a political formation repeatedly reaping electoral victories by projecting its gains in terms of economy-related issues. The Left Front, which has ruled West Bengal since 1977, has consistently projected its gains in areas such as land reforms as part of election campaigns. And these campaigns have received popular support too.

After the West Bengal Left Fronts sixth straight victory in the May 2006 Assembly elections, socio-political observers such as the Jnanpith Award-winning Kannada litterateur and social activist U.R. Ananthamurthy pointed out that the Fronts repeated electoral success had to be seen as the peoples vindication of the alternative policy perspective it had advanced over the past 30 years.

According to CPI leader Atul Kumar Anjan, a basic characteristic of this alternative policy perspective is that of planning from below or planning with the people. This, Anjan pointed out, is an alternative planning vision, which is the very antithesis of the pro-feudal, pro-capitalist planning concepts advanced by bourgeois parties.

Anjan added that the pro-capitalist planning concepts had now taken the form of neoliberal economic policies and the people had repeatedly expressed themselves against these policies in elections. The NDAs loss in 2004 and the defeat suffered by the S.M. Krishna-led Congress in Karnataka in the last Assembly elections are cases in point, he said.

Another stark example of the peoples rejection of neoliberalism was the shock defeat of N. Chandrababu Naidus Telugu Desam Party in Andhra Pradesh.

According to Nil Rattan, Professor at the A.N. Sinha Institute of Political Sciences in Patna, another important reason for the repeated success of the Left Fronts in West Bengal and Tripura is the manner in which the CPI(M) and its allies have been able to use its militant cadre to promote and propagate the gains of the government. He pointed out that the Congress did not have such dedicated cadre anywhere in the country. Even the BJP, with its strong cadre, was not successful in selling India Shining at the grassroots, Nil Rattan told Frontline.

According to Hariraj Singh Tyagi, the only Congress leader who could win an election based on sloganeering in terms of economic policy issues was Indira Gandhi. The 1971 victory of the Congress on slogans such as G aribi hatao and policies such as the nationalisation of banks was certainly a Congress victory on economic issues. But then, he said, Indira Gandhi had a knack for converting any issue into an emotive one.

Emotive sloganeering was her USP. Slogans like garibi hatao and bank nationalisation had a self-respect enhancement quotient, which appealed to the poor. After bank nationalisation, she said, anybody could open a bank account by depositing as little as Rs.5, and through this campaign she converted the bank passbook into a symbol of empowerment. It was this emotive element that resulted in her massive victory, Tyagi told Frontline.

Can Chidambaram, Manmohan Singh and their leader Sonia Gandhi transform the sense of having gained the political upper hand into an emotive campaign a la Indira Gandhi. The answer, as things stand now, does not seem to be in the affirmative. The absence of a committed cadre is a fact that is admitted by many Congress leaders, albeit in private.

Still, the Congress leadership is hopeful that the Budget will have enough effect to keep it in the race in the Lok Sabha elections, especially in the context of the challenges from the BSP in many States, including in its strongholds such as Maharashtra and Karnataka.