The next two months will be filled with the din of campaigning. Before that starts, the manifesto writers will be in action. No one votes on the basis of a manifesto, and the newspapers treat them with the same attention that they give to speeches in Parliament—ie, with bored neglect. Still, these documents point to what a party thinks will win over voters, or which it thinks it must do when in office; sometimes, as with the present government, the manifesto gets morphed into a ‘common minimum programme’ that becomes the basis for an alliance of unlike-minded parties. Even if the Congress would have liked to forget the CMP (in which it conceded too much, too early, too quickly), the CPI(M) wouldn’t let it. In other words, manifestos are important, and you must pay attention.
I fear that no one is going to talk of economic reform — not just because reform qua reform gets no votes, but because the subject is now seen as a positive liability. The short hand version of the story is that the BJP campaigned five years ago on the “Indian Shining” platform, as it mistook one year of rapid growth for all-round prosperity. The Congress capitalised on its opponent’s mistake, talked of the aam aadmi, and promised a series of government hand-outs. Since the UPA has now given life to everything from farm loan waivers to employment guarantee programmes, benefiting every other family in the countryside, the BJP realises that it would be counter-productive to criticise these as boondoggles. So it will take a leaf from the Congress book, and offer more of the same.
The short hand rebuttal of this would be as follows: there was no real victor between the Congress and the BJP, in 2004; there was little difference in the percentage of votes they got or the seats they won; nor was there much of a swing in voter sentiment. Indeed, the BJP would have returned to power at the head of the National Democratic Alliance if it had not switched alliance partners in Tamil Nadu at the last minute. And there would have been no cause then for the aam aadmi vs India Shining construct, after the fact.
What everyone forgets is that the aam aadmi programmes have been financed by the fruits of reform and are therefore the by-products of rapid growth. The tax-GDP ratio has gone up by a good 2 percentage points and more, creating the room for spending about Rs 100,000 crore a year on programmes like the rural employment guarantee (Rs 30,000 crore), the farm loan waiver (a budget hit of another Rs 30,000 crore), and the additional fertiliser subsidy. Take away the fiscal cushion provided by reforms, and you would have got the Budget mess that we have this year, when the tax-GDP ratio has crashed on the back of slower growth.
In other words, if you want to pay for an aam aadmi package, you need rapid economic growth, for which you need reforms that create new efficiencies, and release new energies. That is what will create the room for more fiscal transfers. But no one wants to talk about this dependence; the politicians want only to focus on the short hand end-product. But unrestrained populism can do long-term damage, and create the political climate in which undoing the damage becomes impossible. It is instructive to hark back to another period when politics turned populist: the late 1960s and early 1970s, when laws and rules were made that (even after 40 years) have not been fully overturned even when everyone has concluded that they are counter-productive. That was the Indira Gandhi effect. Ironically, if we are to prevent a repeat version in the form of a Sonia Gandhi effect, the only person who can probably do so is Sonia Gandhi herself.
