People's Democracy

Nilotpal Basu

WITH the announcement of the poll schedule by the Election Commission, there is hectic political activity all round. The developments show that the inevitability of a coalition government is recognised by all political parties. After having announced that there will not be any national level alliance of the ruling coalition � the UPA � the Congress is working overtime to stitch alliances at the regional level. Similarly, the BJP is also finding it quite difficult to finalise the precise nature of seat sharing even with its existing allies in Maharashtra, Orissa and few other states. What is on evidence is a far greater assertion of the regional allies of both the Congress and the BJP. This is only understandable. The process of the combined vote share of Congress and BJP getting reduced since the beginning of the nineties and which reached below 50 per cent � 48 per cent to be precise appears to have further strengthened. But what is also quite clear is that none of these two platforms � the UPA and NDA � are articulating the policy platform on which they will be seeking support from the electorate.

Therefore, it is in this overall atmosphere of the din and bustle of alliance making, the issues and policy questions seem to be pushed to the background. Again, there are no surprises. Because, the question of policy objectives that the UPA and NDA will pursue if they are voted to power is an extremely vulnerable area. More so because the policy thrust that these two combinations have pursued in the past, today stands challenged and discredited.

So far as the electorate is concerned, the battle lines have been clearly drawn. In fact, the concerns of the people, their livelihood questions, had been sought to be glossed over a prolonged period of time beginning with the nineties. The neo-liberal policy paradigm and dovetailing the Indian situation to the international regime of globalisation with the financialisation of the national economies has had its indelible impact. Growth of inequality and unemployment was an increasing facet which faced the Indian aam admi. And, therefore, any focus on this distress of the vast majority of the electorates would, actually, push the advocates of that kind of policy thrust on the back foot.

The policy landscape had its other ominous portents as well. Throughout the nineties � upto 2004 � this had led to a resurgence and advance of the rightwing forces, particularly manifested in the substantial growth of the communal forces and terrorist tendencies.

The 2004 election was a watershed in arresting this movement towards the rightwing direction. Formation of a secular government was a key to this process. But, today in 2009, that process needs to be further consolidated. And, that is not possible without a clear pro-people economic policy orientation.

The compulsion for this is also underlined by the new global context. The unprecedented financial meltdown in the developed world starting with the US economy has sent shock waves over the entire global economy. That the completely deregulated and financialised economic model advanced by Wall Street for the world is not sustainable has been recognised widely. More than anywhere else, this is being recognised in the United States itself. The maiden speech of president Obama to the Joint House of Congress and Senate and the new budget plan for recovery by the administration underlines this reality.

WHO SAVED US FROM  FINANCIAL COLLAPSE?

That the financial crisis is sweeping across the developed economies starting with United States and spreading all across Europe, Japan and some of the other major Asian economies is crystal clear. This crisis has been triggered by the collapse of giant multinational financial sector companies. Many economies in the Balkan, East Europe and the Nordic region have gone absolutely bankrupt.

That similar collapse of financial institutions has not taken place in India is there for all to see. How could India save itself from such an outcome? The chairperson of UPA and the Congress president, Sonia Gandhi, has publicly claimed that it is the sagacity of Congress and the nationalisation of banks four decades earlier that has proved to be an enduring bulwark against the financial meltdown and insulated India from the vagaries of global finance.

But the fact is starting with the nineties, it is this very pre-eminent role of the government, not only in the banking sector but across the financial sector that was sought to be abandoned by the Congress-led administration at different points of time during the last almost two decades. During the NDA period as well, there were aggressive attempts to dilute the role of the government in the financial sector. Particularly, during the tenure of the UPA government, this was a major thrust area. Specific moves to amend the Banking Regulation Act allowing greater say of foreign banks in Indian private banks, privatising pension and provident fund and their deployment in the capital market, increasing the foreign equity component in the insurance companies, making Indian rupee fully convertible on the capital account etc were vigorously pursued. But for the staunch resistance by the Left, these moves would have, surely, gone through. All these moves taken together would have definitely, completely integrated the Indian financial system with the international finance capital driven paradigm. It is anybody�s guess that this would have, inevitably, led to the same kind of meltdown which would have afflicted the Indian financial system with its disastrous consequences. The failure of the UPA chairperson to recognise this is not accidental. It is a conscious attempt to refuse to acknowledge the contribution of the Left in this vital question.

It is true that this very question of financial liberalisation was a key area of conflict between the UPA and the Left which supported the government from the outside. And, that is what the Congress leaders now consider a factor of `instability� of the government. But it is equally true that hundreds of thousands of people of the country whose life-long savings in pensions and provident fund have been saved from the turbulence of the capital market will, definitely, have their own conclusions. And, in a situation where the emphasis was on `manufacturing a consensus�, the dissenting voice of the Left providing the `instability� and forcing a halt on the financial sector liberalisation, has saved India and its financial sector. The latest results of the banking sector for the first six months bear out this reality with public sector banks outperforming private banks, both Indian and foreign. Similarly, the multinational insurance companies� financial losses continue to appear as a bottomless pit in sucking up largesse from the public exchequer � the hard-earned tax payers money � while the major insurance companies in India, which are in the public sector, are comparatively in the pink of health.

Now that there is a paradigm shift on the approach to financial sector and the question of regulation in the developed world, which both of the Congress and the BJP were overzealous to emulate, the Left�s position stands vindicated. It is this record that will sought to be underplayed in the coming elections. But, will the electorate be oblivious of this?

TACKLING THE RECESSION

The major fallout of the financial meltdown in the developed world is the economic recession. The severity of this is again a fact which is universally accepted. The measures to tackle this crisis have also thrown up a debate. In the Indian context, this is much more relevant because over the last two decades, the Indian economy had become much more integrated with the global economy, with major emphasis on trade liberalisation. Therefore, unlike the financial sector, the economic recession is proving to be extremely hard for the primary sectors of our economy. Both in industry and agriculture, demand has shrunk and the inadequacy of infrastructure is proving to be lethal. The earlier emphasis on the private sector for infrastructure building and the commensurate withdrawal of public investment is having its disastrous consequences. How to shore up demand? Here, again, the UPA government�s emphasis seems to be on tax and interest rate cuts.

This is in sharp contrast with the approach of major countries like the US and China. China, of course, affected by the recession and downslide of its export with the consequent adverse impact on manufacturing jobs, was the first to come out with a massive fiscal stimulus package of $587 billion. The direction of this huge public investment was on expenditure for infrastructure building rural development and social sector with emphasis on employment generation and activating the domestic demand. The Obama administration also has now announced an almost $500 billion package with underlined thrust on employment and social security. As against this, the additional plan expenditure as spelt out in our interim budget is only Rs 40,000 crore, or, around $8 billion. This is little more than 0.5 per cent of our GDP. With several lakhs of jobs lost across the manufacturing and the service sector, there is no major incremental expenditure in the NREGA, not to speak of extending a similar programme in the urban areas which is suffering from jobloss. What will be the approach of the new government on this question? That is what the electorate would like to know. And, that is why precisely there is a deafening silence on the policy question in course of the alliance-making exercise.

In contrast to such a policy void, the Left has not limited its intervention by spelling out its preference for a vigorous public expenditure driven policy for employment generation, infrastructure building and addressing food and social security compulsions.

The Kerala LDF government has unveiled a major fiscal stimulus package in its budget which amounts to more than Rs 10,000 crore and which is 5 per cent of the gross state domestic product. This expenditure includes Rs 5000 crore for water supply, irrigation and public works. While another Rs 5000 crore is for housing scheme for the more vulnerable sections of the society. Similarly, the West Bengal fiscal package earmarks more than Rs 5000 crore for housing schemes for BPL and low income groups in rural and urban areas, special subsidy for supplying rice at Rs 2 per kg for BPL and antyodaya beneficiaries, interest subsidies for bringing down interest rate to 4 per cent for self help groups and for agriculture and rural electrification. The emphasis of both these packages is on public expenditure driven relief and efforts at absorbing job loss and new employment generation.

It is the central question of jobs, schooling, health, food security which constitute the overriding concern of the aam admi. The contrasting policy approach of the two combinations of UPA and NDA, on the one hand, and the Left, on the other, will surely be under focus for the coming weeks in the run-up to the elections. It is the working people � the aam admi � both in the rural and urban areas who will engage in this discourse. We have to ensure that the views and policy alternatives of the Left reaches the last hutment and the shanties of the country. The next government which the people will elect must have a more pro-people orientation. And, that is only possible with a combination of forces which will have the political will to push an alternative policy direction.