Jobs, cronyism, and welfare

A lacklustre campaign throws up some differences in economic strategy

More than 10 days remain in this general election campaign, and it is fair to assume that few new issues will be raised in the time that remains. It has been a relatively dull affair in comparison to many past elections; the personal popularity of the incumbent Prime Minister has perhaps led many to assume that there is no real challenge from the Opposition, thereby rendering the process less interesting. Recent claims that this election has become more competitive seem to have affected the markets and elements of the media discourse, but do not seem to be backed up by anything concrete.
 

Yet, even if this is not the most competitive general election of our lifetime, it is nevertheless worth unpacking some of the narratives to attempt to identify what, if any, economic issues are considered worthy of democratic debate.
 

The Congress’ manifesto seemed to promise that some such debate might be opened. It was heavily populist compared to previous iterations of the party’s platform. It promised major changes, for example, to India’s reservations in jobs and educational institutions: an amendment to the Constitution that would remove the 50 per cent cap that currently exists on quotas, and additional quotas for the economically weaker sections of society. The focus on public sector jobs continued with the assurance that the party would fill “nearly 30 lakh vacancies” in the Union government and end the slow process of contractualisation within the state sector. The government’s reforms to military recruitment, meant to reduce the Army’s excess manpower, were also promised to end.
 

One would expect that this set of issues would touch off a debate on the best way to create employment growth in India, and whether such growth is inclusive. Given some recent studies have shown that job and wage growth in India has stalled, that would have been a timely and relevant discussion. There are more than enough arguments to be made against the Congress’ preferred mechanism for ensuring job growth. To give him his due, Prime Minister Narendra Modi rolled out some of them in an interview last week. He pointed out that government jobs are not the same as employment generation, and suggested that small-scale “Mudra” loans and infrastructure investment also created jobs — 60 million of them, he claimed. He also attempted to defend his government’s changes to recruitment for public-sector jobs. But that may be a losing argument; paper leaks, postponements and cancellations have rendered the recruitment process a nightmare for applicants.
 

Yet it might be worth pointing out that this strategy clearly also has declining effectiveness. Infrastructure investment — particularly if it results in construction — can indeed expand the opportunities available for unskilled labour. Some studies suggest that construction is, in fact, the only sector where this has happened and thus rural-to-urban migration in India, for example, is disproportionately dependent upon the health of that single sector. Stories from the heartland are run through with concerns that even young people who have sunk money in online coaching classes or entrance examinations wind up working as stone crushers or for building contractors. Broadening these opportunities appears necessary. This subject, of a new job-creating growth paradigm, has been avoided by both the government and the Opposition.
 

The last general elections, in 2019, were fought — to the extent that economics played a role —around questions of welfare. The Congress promised a basic income scheme of Rs 72,000 a year for the poorest 20 per cent of the country. The government, meanwhile, emphasised the improvements it had made to welfare delivery in kind, such as to the public distribution system and the availability of cooking gas. Post-election analysis insisted that the creation of a “labharthi varg”, or a class of welfare recipients numbering over 200 million, provided a comfortable cushion to the incumbents’ vote share.
 

Since then, the Bharatiya Janata Party has doubled down on its dominance of this narrative. Its victories in the last round of assembly elections, it has been argued, were a product of the “Modi ki guarantee” slogan, which centred around the effectiveness of welfare, even at the state level, through the Prime Minister’s personal intervention. The Congress since then has attempted to one-up the government by promising to double the free food ration to 10 kilograms a month. But there is, perhaps, some fatigue with this particular issue. On the ground, “Modi ki guarantee” advertisements have been slowly replaced over the course of the campaign. It is unlikely that post-2024 analysis will be able to identify welfarism as the major theme of this campaign the way it was in 2019.
 

The relationship between the state and big business, however, has not gone away as an issue. The initial salvo here was fired by the Prime Minister, when he suggested that Opposition leader Rahul Gandhi was no longer attacking large industrialists because “tempos full of notes” had reached the Congress. Mr Gandhi seems to have, in turn, intensified his rhetoric, attacking the government for its closeness to oligarchs. In one such speech, he said: “The whole public sector will disappear, and the country will be ruled by 22-25 people. Who are these people? They are the billionaires of India … whose eyes are on your land, forest and water… All the airports, power stations, ports, infrastructure have been given by PM Modi to these 22-25 people. He has never waived off your loans, but he has waived off loans of 22 richest people for Rs 16 lakh crore.”
 

The Prime Minister has shifted somewhat in response to this. In recent speeches in Jharkhand, which has a long history of Maoist violence, he has said that Mr Gandhi is “using Maoist language” and that investors will “think 50 times” before investing in Congress-ruled states as a consequence. Is there a clear distinction being built up here? The Congress has certainly taken a sharp turn left, which has perhaps encouraged the PM to focus on his investment-friendly credentials. The obvious rejoinder — the fact that private investment has not exactly taken off over the past 10 years — has however not been made 

by the Opposition.
 

Economic policy might not be the dominant issue in this election. But, to the extent that it is, the difference on matters such as privatisation seems larger than in previous years; but the Opposition has not succeeded in defining itself around the central concern for many voters, employment generation. The government seems to continue to get a free pass, regardless of its record, on that particular issue.

The writer is director, Centre for the Economy and Growth, Observer Research Foundation, New Delhi