India Shining, Act II

The crisis in the UPA alliance seems over. The Congress has announced it will take the Left's objections on the increase in oil prices and the disinvestment ofBHEL into account. This is politicalese for saying that it will look for an opportunity to bring down the former—possibly when international oil prices slacken—and will 'postpone' the disinvestment ofBHEL. The Left has still not relented on its decision to boycott the meetings of the coordination committee, but may do so when the government has delivered on its half-promises. The share markets, in any case, have barely blinked.

So is everything really alright? Prime ministers and party presidents live from day to day, so they can be excused if they are not among the first to see the clouds that gather on the horizon. But on this occasion, even they cannot be unaware that control of the government is slipping from their grasp and that a moment of truth is approaching—they will have to decide whether to continue giving in to the blackmail of the Left for four more years or make a stand and, if necessary, take the issue of who rules to the people.

In retrospect, the Congress may come to identify this as the turning point in its fortunes during its current stint in power. For not only has it signalled its weakness to the public, but it is being dragged by the Left into a mindless defence of a status quo in domestic economic policy that will defeat every promise it made to the people at the time of the elections.

Let us look at what the Left has been pressing it to do: first, do not raise the price of essential goods and services even in the face of a rise in their cost of production. Second, do not close down or sell off even chronic loss-making units in the public sector even though they drain away money that could go into fresh investment and create new jobs. Third, do not change the public distribution system for foodgrains although it costs Rs 26,000 crore a year in subsidies and only a quarter of the subsidised food goes to the poor. Fourth, do not relax the hiring and firing laws in industry even though this means that all new employment takes the form of contract labour at starvation-level wages without any social security benefits. Fifth, do not raise school and university fees even though this means that the quality of education becomes a sick joke. Sixth, do not allow private schooling to develop but continue pouring more funds into state schools where teachers show up for work on an average for three days in a week. The list of the Left's 'don'ts' is endless.

The Left, in short, wants absolutely nothing to change. It wants to protect all existing beneficiaries of subsidies, and all existing job-holders even if that means denying jobs to the young people who flood the market every year. This is not socialism, but the very quintessence of reactionary politics. But why is the Congress so utterly on the defensive? The short answer is that it is an old party bankrupt of ideas. Faced with a surprise victory, it hastily donned the clothes of the Left. Ever since, the Left has been in the driver's seat.

In politics, good intentions are worth nothing; all that matters is perception. To the ordinary Indian, the status quo has not meant protection of the poor but the continued enrichment of the rich. In the past 14 months, he (or she) has seen salary levels in the higher professional rungs shoot into the stratosphere. He has seen Rolls Royce and Aston Martin open showrooms in the cities to sell cars worth two and three crores apiece. He has seen a new industrial and managerial elite lap up Bulgari ties at Rs 7,700 each, Omega and Rado watches at Rs 1.93-3 lakh, Chanel perfumes that start at Rs 4,600, Hugo Boss shirts at Rs 6,100, designer music systems for Rs 5 lakh and Louis Vuitton shoes at Rs 25,000. Finally, he has seen these developments celebrated in the media as signs that India has finally come of age and not heard a word of disapproval from the government that he elected. Come of age for whom, he asks, but receives no answer.

The Congress could have checkmated the Left if it had had a programme for promoting social equity of its own. But a year has passed and it has not put forward a single proposal. Whatever happened to unemployment insurance for the organised sector? A bill was prepared during the last Congress government but this one has chosen to disavow its existence. What happened to old-age pensions and social insurance for the 400 million workers of the unorganised sector? Again silence! Why are 78 dams being built in the Northeast without any effort to make the people who lose their land shareholders in the revenue these will generate?

Without a programme of its own, it is being pushed to disaster by the Left. The Congress-ledUPA promised to increase investment in infrastructure but cut it by 40 per cent to accommodate 'social' programmes. The lack of fresh orders has made industrial recovery wither on the vine—the index of industrial production has been falling steadily since October last year. To more and more people, it is 'India Shining' all over again. It is not too late for the Congress to change this perception. But it is running out of time—and fast.