Category: BJP | Page 6

29 August, 2014

Why Advani must sometimes wish that he was a Nehru-Gandhi

Lal Krishna Advani in his dreams must sometimes wish that he should have belonged to the Nehru-Gandhi family. Irrespective of what happens to the political fortunes of the Congress, the Nehru-Gandhis remain at the top.
Even when the party is not under the control of a Nehru-Gandhi, the Congress politicians keep conspiring endlessly till they have managed to install a Nehru-Gandhi at the helm of affairs. This was clearly the case between 1991-1996, after Rajiv Gandhi was assassinated and his widow Sonia refused to take over. Nevertheless the Congress installed Sonia as the president of the party as soon as she was ready.
As Rasheed Kidwai writes in Sonia – A Biography “Throughout the Narsimha Rao regime, 10 Janpath[where Sonia continues to stay] served as an alternative power centre or listening post against him.” In December 1997, Sonia Gandhi indicated that she wanted to play a more active role in Congress politics. It took the party less than three months to throw out Sitaram Kesri, the then President of the party and put Sonia in charge in his place.
Advani has not been anywhere as lucky as Sonia. In fact, he has constantly been sidelined in the Bhartiya Janata Party (BJP) over the last five years. And unlike Sonia, who continues to enjoy the spoils of the hard-work of her husband’s ancestors, Advani built the BJP right from scratch.
The final nail in the coffin for Advani was the decision by the newly appointed BJP president Amit Shah to drop him from the 12-member Parliamentary Board of the Party. Advani though has been included in the newly created margadarshak mandal, where he is unlikely to have any decision-making powers.
In fact, Advani had to recently go through the ignominy of his nameplate being removed from his room in Parliament (the nameplate was put back later). This after being denied the post of the Lok Sabha Speaker, which he wanted. All this must be too much to handle for a man who is BJP’s senior most active leader, and refuses to retire.
The BJP was formed on April 5-6, 1980, after it broke away from the Janata Party. The Janata Party had been formed a few years earlier in 1977, with the merger of Congress O, Bhartiya Lok Dal, the Socialist Party and the Jana Sangh (the BJP’s earlier avatar), with the idea of taking on Indira Gandhi and her Congress party in the 1977 Lok Sabha elections.
The Janata Party won 295 seats in the elections, with 93 MPs coming from the erstwhile Jana Sangh. But trouble soon broke out and different constituents of the party could not get along with each other. This experiment against the Congress ended in 1980, and the BJP was formed. Atal Bihari Vajpayee became the president of the BJP, and Advani was its general secretary.
Interestingly, the party chose “Gandhian socialism” as its credo. Kingshuk Nag writes in The Saffron Tide—The Rise of the BJP that a “consensus emerged…on Gandhian socialism being the credo of the new party; in other words, it would fashion itself like the Janata Party.”
Advani explains this in his autobiography My Country, My Life: “The stress from the beginning was not on harking back to our Jana Sangh past but on making a new beginning.” The new beginning happened primarily because both Vajpayee and Advani had been influenced a lot by Jaiprakash Narayan, who was the main architect behind the Janata Party.
Also, what did not help was the fact that Indira Gandhi in her second avatar as the Prime Minister had in a way hijacked the “Hindutva” agenda, which the Jan Sangha had stood for. “Indira Gandhi had become religious with vengeance after coming to power in 1980 and began visiting temples with fervour. In public imagination, the impression created was that of a Hindu lady seeking the benefaction of the Gods. The policies in her tenure were also interpreted as being pro Hindu,” writes Nag.
This newly discovered “Gandhian socialism” did not work for the BJP in the Lok Sabha elections that happened in December 1984, after the assassination of Indira Gandhi by her bodyguard. The party won just two seats in this election. A committee was formed to try and understand the reasons for the electoral debacle.
As Nag writes “The committee…found a lot of lacunae in the working of the BJP. The committee also commented on the lack of political training of workers on political, economic, idealogical and organizational matters.” Or as a BJP insider told Nag “Basically, the committee politely said the party was going nowhere.”
Vajpayee resigned in the aftermath of the debacle and Advani took over as the president of the party. With Advani at the helm, the relations with the Rashtriya Swayemsevak Sangh(RSS) also improved significantly. In the years to come, the BJP went back to Hindutva and gradually junked “Gandhian Socialism” as its main credo. In fact, in 1990, Advani launched a rath yatra in which he wanted to travel in a motorized van from Somanth in Gujarat to Ayodhya in Uttar Pradesh.
But before he could enter Uttar Pradesh, Lalu Prasad Yadav got Advani arrested in Bihar. As Advani recounts in his autobiography “My yatra was scheduled to enter Deoria in Uttar Pradesh on 24 October. However, as I had anticipated, it was stopped at Samastipur in Bihar on 23 October and I was arrested by the Janata Dal government in the state then headed by Laloo Prasad Yadav (sic). I was taken to an inspection bungalow of the irrigation department at a place called Massanjore near Dumka on the Bihar-Bengal border [Dumka now comes under the state of Jharkhand].”
Even though Advani could not complete the yatra it was a huge success and Advani was greeted by huge crowds wherever he went. “At some places, charged-up followers applied tilak to the Ram rath while at other places, those moved by the movement smeared dust from the path of the rath on their forehead,” writes Nag.
Advani went around building the party on the ideology of hardcore Hindutva, taking the number of seats that the party had in the Lok Sabha to 85 in 1989 and 120 in the 1991. This fast rise of the party was built on slogans like “saugandh Ram ki khaate hain mandir wohin (i.e. Ayodhya) banayenge” and “ye to kewal jhanki hai Kashi Mathura baaki hai”. As Advani went about his job, Vajpayee took a back-seat for a while.
Nevertheless, Advani soon realized that temple and Hindutva politics could only get the party to a certain level. He also realized that he was looked at as a Hindu hardliner and as long as he led the party, it would never be in a position to form the government. Hence, in November 1995, at the end of his presidential address at the BJP national council meet held in Mumbai, he announced that “We will fight the next elections under the leadership of A.B.Vajpayee and he will be our candiate for a prime minister…For many years, not only our party leaders but also the common people have been chanting the slogan, “Agli baari, Atal Bihari”.”
This was a political master stroke. At the same time it needs to be said that not many people would have been able to make the decision that Advani did, if they had been in his position. It is never easy to build an organisation right from scratch and then hand it over to someone else, to lead it.
With Vajpayee at the helm, other poltical parties were ready to ally with the BJP. The BJP led National Democratic Alliance first came to power in 1998. They were in power till 2004, when they lost the Lok Sabha elections. After the 2004 Lok Sabha elections, Vajpayee gradually faded from the limelight.
In these years, the spin-doctors of Advani had managed to tone down his image as a Hindu hardliner. This can be very gauged from the fact that Nitish Kumar had no problem with being in alliance with an Advani led BJP, but he wasn’t ready to work with a Narendra Modi led BJP.
The NDA fought the 2009 Lok Sabha elections under the leadership of Advani and lost. And from then on, the stock of Advani has constantly fallen in the BJP. The decision to drop him from the Parliamentary Board of the party, as mentioned earlier, is probably the last nail in the coffin of his political career.
Interestingly, Narendra Modi was also handpicked by Advani to play a greater role in the BJP. As Nilanjan Mukhopadhyay writes in Narendra Modi – The Man. The Times “From the beginning it was evident that Modi was Advani’s personal choice and he was keen to strengthen the unit in Gujarat because the state was identified as a potential citadel in the future.”
Advani also mentored Modi during his early days in politics. “It was Advani who mentored Modi when he virtually handpicked him into his team of state apparatchiks after recommendations from a few trusted peers in the late 1980s. Advani also gave Modi early lessons in how to convert the mosque-temple dispute into one of national identity,” writes Mukhopadhyay.
But in the recent years while Advani’s stock within the BJP and the RSS has fallen dramatically, Modi’s stock has been on a bull run. The shishya has become the guru. The trouble is that the guru does not want to retire, and is probably still itching for a one-last-fight.
But there is not much that he can do about it. Advani’s side-lining is an excellent lesson of what happens when one overstays one’s welcome in politics as well as life. There is a time to work. And there is time to retire and move on.
To conclude, Advani’s one remaining political ambition would have been to become the prime minister of India. But that somehow did not happen. As Salamn Rushdie aptly put in Midnight’s Children “This is not what I had planned; but perhaps the story you finish is never the one you begin.”
The article originally appeared on www.firstpost.com on August 29, 2014

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)

26 August, 2014

How Nitish's pragmatic politics beat brand Modi in Bihar

In the recently concluded bye-election in Bihar, the Bhartiya Janata Party (BJP) won only four out of the 10 seats that went to the polls. The alliance of Rashtriya Janata Dal (RJD), Janata Dal United (JD(U)) and Indian National Congress won six seats.
It was widely expected that BJP would do well in these polls given that in the Lok Sabha elections along with Ram Vilas Paswan’s Lok Janshakti Party(LJP) it had won 28 out of the 40 Lok Sabha seats in the state. The LJP won six out of the 28 seats.
In the aftermath of this débâcle a lot of analysis has been put out on why the BJP lost. Some analysts pointed out that the Modi magic did not work in the same way during the bye-poll as it did during the Lok Sabha polls, a few months back. Some others said that Modi did not manage these polls on his own and it was the Bihar unit of the party that managed the polls, and hence the BJP+LJP combine lost.
As veteran political journalist Ajoy Bose writes in The Economic Times “Narendra Modi’s spectacular triumph in the Lok Sabha polls three months ago may not signal a tectonic shift in Indian politics as many political pundits predicted. Nor does the BJP seem poised to become the predominant party in the country despite forming the first single-party majority government in New Delhi after three decades.” Still others have said that people tend to vote differently in Lok Sabha and state assembly elections.
The trouble is none of these analysts have bothered to look at the voting pattern. If they had done that, they would have known that there is just one reason behind the BJP not doing well in Bihar and that is the “first past the post system”.
In the Indian political system, the candidate who wins the most number of votes wins the election, even though a major part of the electorate maybe against him. It is not the perfect way to elect leaders, but that is what we have got.
Election commission data shows that in the Lok Sabha elections, the BJP+LJP combine had got 35.8% of the votes polled. The RJD and the Congress had an alliance during the Lok Sabha polls. The JD(U) had fought the polls on its own. The RJD got 20.1%, the Congress got 8.4% and the JD(U) got 15.8% of the votes polled. In total, this amounted to 44.3% of the total votes polled.
So RJD+Congress+JD(U) got more votes than BJP+LJP. Nevertheless, since RJD+ Congress and JD(U) were not in alliance, these votes did not translate into Lok Sabha seats.
Now what happened in the recent bye-election? Data from the election commission shows that the RJD+Congress+JD(U) got 45.6% of the total votes polled. The BJP+LJP got 37.9% of the votes polled. Given that, this time JD(U) was not fighting the elections separately, the votes polled translated into assembly seats as well, unlike the Lok Sabha polls.
Further, the vote percentages have not changed majorly since the Lok Sabha elections, as a lot of analysis seems to suggest. In fact, the vote share of both the RJD+Congress+JD(U)alliance and the BJP+LJP has improved marginally at the cost of other parties.
The BJP+LJP combine lost simply because Lalu Prasad Yadav and Nitish Kumar decided to come together. What it tells us very clearly is that in the first past the post system, tactical political alliances can clearly neutralize the impact of brand Modi. Both Nitish and Lalu realised this the second time around and came together to form an alliance, despite having been sworn political enemies for nearly two decades.
In fact, early in his political career Nitish had decided to be pragmatic about his politics. Sankarshan Thakur descirbes a very interesting incident in the Single Man: The Life & Times of Nitish Kumar of Bihar. This incident happened sometime in the late 1970s, after the Emergency had been lifted.
Karpuri Thakur became the Chief Minister of Bihar in December 1977. Nitish quickly became disillusioned with this government. As Sankarshan Thakur writes “He thought it had betrayed the promise of the JP movement, strayed from Lohia…He had turned a critic and went about addressing seminars and meetings on how and why this was not the dispensation he had fought for.”
One day, while at the India Coffee House, a scrap at another table, got Niish going. As Thakur writes “He banged the table with his fist and announced: ‘Satta prapt karoonga, by hook or by crook, lekin satta leke acha kaam karoonga.’ (I shall get power, by hook or by crook, but once I have got power I will do good work.”
Nitish became the Chief Minister of Bihar nearly three decades later in 2005. And for the first half of his political career, he propped up Lalu Prasad Yadav even though he knew that Lalu wasn’t fit to govern. Thakur puts this question to Nitish in the Single Man: “Why did you promote Laloo Yadav so actively in your early years?” he asked.
And surprisingly, Nitish gave an honest answer. As Thakur writes “’But where was there ever even the question of promoting Laloo Yadav?’ he mumbled…’We always knew what quality of man he was, utterly unfit to govern, totally lacking vision or focus.”
So why then did Nitish decide to support him? “’There wasn’t any other choice at that time,’ Nitish countered…’We came from a certain kind of politics. Backward communities had to be given prime space and Laloo belonged to the most powerful section of Backwards, politically and numerically.” And thus Nitish ended up supporting Lalu for nearly the first two decades of his political career.
Nitish finally decided to go on his own at the Kurmi Chetna Rally [Nitish belongs to the Kurmi caste] in February 1994. At this rally he roared “Bheekh nahin hissedari chahiye..Jo sarkar hamare hiton ko nazarandaz karti hai who sarkar satta mein reh nahi sakti (We seek our rightful share, not charity, a government that ignores our interests cannot be allowed to remain in power).”
Nevertheless, Nitish had to wait for 11 more years to finally come to power in Bihar. An
d this finally happened after he entered into a pragmatic alliance with the “communal” Bhartiya Janata Party (BJP) (As most of the other parties tend to look at the BJP). After more than eight years, Nitish decided to break this alliance once it was more or less clear that Narendra Modi would be BJP’s prime ministerial candidate.
Given this background, it is not surprising that Nitish decided to ally with Lalu even though he thought that Lalu was “utterly unfit to govern”. It was a pragmatic decision to get power by hook or by crook, as Nitish put it many years back.
This pragmatism worked in the recent bye-election. Now Nitish is trying to build an even more formidable alliance by getting the left parties together as well. And this alliance, if it comes together, will be even more difficult to beat, the brand Modi notwithstanding.

The article was published on www.Firstpost.com on August 26, 2014

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)

26 August, 2014

How Nitish's pragmatic politics beat brand Modi in Bihar

The article was published on www.Firstpost.com on August 26, 2014

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)

15 July, 2014

The risk of high food inflation hasn't gone away yet

Vivek Kaul

Consumer price inflation(CPI) for the month of June 2014 came in at 7.31%. This was the lowest since January 2012. Wholesale price inflation(WPI) for the month of June 2014 had come in at 5.43%, which was a four month low.
A major reason for the fall in overall inflation has been a fall in food inflation, which as measured by the CPI, stood at 7.90% during the month of June 2014. In May 2014, the rate had stood 9.4%. In June 2013, the rate was at 11.84%.
Food inflation has been controlled to some extent due to several steps taken by the Narendra Modi government, which was sworn into power in May 2014. The government has set limits on the export of staples like onions and potatoes. It also decided to sell 5 million tonnes of rice in the open market.
These steps have obviously helped in the near-term. But how do things look over the next few months? TheIndia Meteorological Department in a press release dated July 11, 2014, pointed out that the“rainfall activity was deficient/scanty over the country as a whole” for the period between July 3 and July 9, 2014. This deficiency of rainfall was at 41% of the long period average.
This delay in rainfall has led to a 51% annual decline in the sowing of kharif crops. What this means is that there will be an impact on their production in the months to come, which is likely to lead to a price rise.
When it comes to rice and wheat, the government has enough stock to ensure that it can prevent a rise in their price. As on July 1, 2014, the Food Corporation of India, had a food grain stock of close to 69 million tonnes, which is much more than the strategic reserve that it needs to maintain. A part of this stock can be sold in the open market, in case the lack of adequate rainfall has an impact on the production of food grains, in the months to come.
But the government does not have the same option when it comes to vegetables and fruits. WPI data suggests that vegetable prices fell by 5.89% in June 2014, in comparison to a year earlier. CPI data suggests that vegetable prices went up by 8.73% in June 2014, in comparison to a year earlier.
If we look at the breakup provided by the WPI data potato prices went up by 42.52% in June. A major reason for the same seems to be the fact that the delay in the rains has led to a delay in sowing, harvesting and supply of crops.
Data provided by the National Horticultural Research and Development Foundation proves this. As on June 2, 2014, the potato prices at the Agra mandi were Rs 12.15 per kg and the arrival of potatoes was at 1350 tonnes. On July 14, 2014, the arrival of potatoes had fallen to 720 tonnes and the price had shot up to Rs 16.20 per kg. This explains to a large extent the dramatic rise in the price of potatoes in the month of June. The current trend suggests that the price of potatoes will continue to rise in July as well.
Also, despite a minimum export price of $450 per tonne being set, a huge amount of potatoes are being exported to Pakistan. A recent PTI report suggests that “as much as 1,500 to 2,000 tonnes of potatoes are being exported to Pakistan per day through Attari-Wagah land route in the wake of scarcity of the main vegetable crop in the neighbouring nation.”
And what about onions? Onion prices in June 2014 went up by 10.7% in comparison to the same period in 2013. In June 2013, onion prices had risen by 114.76%. The onion prices between May and June 2014 rose by 16.06%.
The arrival of onions at Lasalgaon, the biggest onion mandi in the country has come down between June and July. In June, the average daily arrival of onions had stood at around 1590 tonnes, at an average price of Rs 13.67 per kg. For the first half of July, the average arrivals have fallen to a little over 1200 tonnes at an average price of Rs 19.67 per kg.
This clearly is not a good sign. A recent report in the Business Standard pointed out that the National Horticultural Research and Development Foundation put “the onion inventory across the country at 2.4-2.5 million tonnes.” The country consumes around 1.2 million tonnes of onions per month. This means that the current stock of onions will last till end of August 2014. “The problem will aggravate in September, when the existing stocks finish. The government should start importing,” RP Gupta, director of National Horticultural Research and Development Foundation told the Business Standard. Onions can last as long as six months. Hence, unlike vegetables, the government can import and store onions if it wants to.
Other than this, fruit and milk prices continue to rise at a very high rate. Fruit prices in June 2014 rose by 21.4%( as per the CPI) and milk prices rose by 10.82%(as per the CPI). Egg, meat and fish prices also rose by 10.27%(as per the CPI) in comparison to last year. This is an impact of the loose-fiscal policy run by the Congress led United Progressive Alliance government. As a recent report titled What a Waste! Brought out by Crisil Research points out “Loose fiscal policy, rising demand for high-value food items and substantial increases in wages — especially in rural wages, as a spillover [of] the rural employment guarantee scheme — have translated into higher demand for proteins. This has raised the prices of items such as milk & milk products, egg, fish and meat as supply falls short of demand. The production of milk and eggs has risen by only 3-4% a year, compounded annually, during 2009-10 to 2012-13, while inflation in this category has risen 14-15% a year.”
Due to these reasons the risk of high food inflation will not go away any time soon.
The article appeared with a different headline on www.firstbiz.com on July 15, 2014

(Vivek Kaul is a writer. He tweets @kaul_vivek)

11 July, 2014

No "acche din" for govt finances any time soon

Vivek Kaul

So what do the finance minister Arun Jaitley and the Hindi film industry have in common? They both love the number “Rs 100 crore”. The Hindi film industry cannot stop talking about the films that have done a business of Rs 100 crore or more. Jaitley, in his maiden budget speech, used the Rs 100 crore number 29 times, while making allocations to various government schemes.
This has led a lot of experts to comment that Jaitley has spread himself too thin. Whether that turns out to be the case, only time will tell. Nevertheless, in the budget speech, Jaitley, like finance ministers before him, did not talk about the single biggest expenditure of the government.
The single biggest expenditure of the government of India is debt servicing i.e. the interest that it pays on its debt and the money that it spends in repaying it. Governments all over the world, including the Indian government, spend much more than they earn. This difference is referred to as the fiscal deficit and is financed through borrowing. The money is borrowed for a certain period. During the period a certain amount of interest needs to be paid on it. And at the end of the period, the borrowed money needs to be repaid.
Over the years, the government has been spending more than it has earning. Given this, the fiscal deficit has shot up. In 2007-2008, the fiscal deficit of the Indian government had stood at Rs 1,26,912 crore or 2.6% of the GDP. This had shot up to Rs 5,15,990 crore or 5.7% of the GDP, by 2011-2012. The fiscal deficit projected for 2014-2015 stands at Rs 5,31,177 crore or 4.1% of the GDP.
This increase in fiscal deficit has been financed by a greater amount of borrowing. A greater borrowing has meant that the cost of debt servicing for the government has gone up over the years. In 2009-2010, the total debt servicing cost of the Indian government had stood Rs 2,94,857 crore. The fiscal deficit during the course of that year had stood at Rs 4,18,842 crore. Hence, the ratio of the debt servicing cost to the fiscal deficit worked out to 0.7.
By 2013-2014, the total debt servicing cost had shot up to Rs 5,43,267 crore. As the amount of money borrowed went up, so did the interest that needed to paid on it. And, so did the repayments. The fiscal deficit for the year stood at Rs 5,24,539 crore. Hence, the ratio of debt servicing cost to the fiscal deficit shot up to 1.04.
For the current financial year, the total debt servicing cost has been estimated to be at Rs 6,43,301 crore. Interestingly, in the interim budget presented by P Chidambaram in February earlier this year, the number had stood at Rs 6,74,184 crore. How has the number come down by more than Rs 30,000 crore, that Mr Jaitley did not explain. The fiscal deficit for the year has been projected at Rs 5,31,177 crore. Hence, the ratio of the total debt servicing cost to the fiscal deficit is now at 1.21.
What does this ratio tell us? It tells us that the entire borrowing(and a part of the income) of the government of India is being used to repay past borrowing and to pay interest on it. In simple everyday terms it means that I am using one credit card to pay off what is due on another credit card.
In such a scenario, it becomes very difficult for the government to spend money on other important areas. It also explains to a large extent why Jaitley made so many allocations of just Rs 100 crore. If he had the money, he would have probably preferred a higher amount of allocation. Of course, Mr Jaitley cannot be blamed for this mess which he has inherited from the Congress led United Progressive Alliance (UPA) government.
So what is the way out of this financial hole? The revenue receipts of the government(i.e. the money that it earns through tax and non tax revenue) for the year 2007-2008 had stood at 10.2% of the GDP. For the year, 2014-2015, the revenue receipts are at 9.2% of the GDP.
What this tells us clearly is that the revenue receipts of the government have come down and need to go up. How can that be done? The Modi government has been gung ho about getting the black money of Indians stashed abroad back to India. But what about all the black money that is there in the country? Wouldn’t that be easier to recover? While the intention to get back all this black money from abroad is certainly noble, how practical is it? Also, if the idea is to recover black money then why discriminate between those who have managed to transfer the money abroad and those who haven’t.
The Modi government can borrow an idea or two from what happened in Greece. In order to recover black money, the Greek government used Google Earth to track those who have swimming pools and then cross indexed their address with the amount of tax they are paying. Ideas along similar lines which use information technology extensively in order to identify people who are not paying the correct amount of income tax, need to be come up with.
In the budget speech made in February 2013, the then finance minister P Chidambaram had estimated that India had only 42,800 people with a taxable income of Rs 1 crore or more. What this clearly tells us is that a lot of people are not paying income tax.
In a country where 27,000 luxury cars are sold every year, the number of individuals with a taxable income of Rs 1 crore has to be more than 42,800. These individuals, who include property dealers, doctors, chartered accountants etc., need to be made to pay their fair share of income tax.
Of course, any such move will not immediately lead to results. The way to do is to execute a few pilot projects in different parts of the country and identify the big defaulters and get them to pay the income tax. This should be extensively publicized as well, so as t ensure that other similar people start paying the right amount of income tax.

The piece originally appeared in The Asian Age/Deccan Chronicle dated July 11, 2014 under a different headline.

(Vivek Kaul is the author of Easy Money: Evolution of the Global Financial System to the Great Bubble Burst. He can be reached at [email protected])