During his heydays in the 1990s and the early 2000s, Lalu Prasad Yadav never organised political rallies.
He organised Railas.
These were very big political rallies held at the Gandhi maidan in Patna. And they were deemed to be so big by Lalu that the feminine sounding word ‘rally’ proved inadequate to describe them.
Hence a new word Raila was coined.
But time passed and the world went around, and in the end the old adage ‘you can’t fool all the people all the time’, came true in case of Lalu as well.
These days Lalu is a minor player both at the state and the central level. Given this, every few months you can hear him saying nice things about Sonia Gandhi, whenever the opposition parties choose to attack her.
A couple of days earlier Lalu went back to his favourite method of political engagement. He organised a parivartan (change) rally in Patna (and not a Raila). News reports suggest that Lalu hired thirteen trains to ferry his supporters to Patna for the rally.
This is a huge change from the usual. In the Bihar, that this writer grew up in, a rally would mean an open invitation to the supporters of Lalu to board any train that they wanted to.
Also like any good father would, Lalu used the occasion of the parivartan rally to soft launch his sons Tej Pratap and Tejashwi into big-time politics. Tej Pratap is a BA drop out and Tejashwi was a budding cricketer who played one Ranji trophy match for Jharkhand in November 2009. He was also a part of the Delhi Daredevils IPL team, warming his bum on the bench for a few seasons.
It is interesting if we compare this launch with that of Lalu’s own launch into serious politics which happened in the early 1970s. Lalu had quit student politics in 1970, after he lost the election for the post of the President of the Patna University Students Union (PUSU) to a Congress candidate. Before losing this election, Lalu had been a general secretary of the PUSU for three years.
As Sankarshan Thakur writes in Subaltern Sahib: Bihar and the Making of Lalu Yadav, “On the eve of elections of Patna University Students Union (PUSU) in 1973 non-Congress student bodies had again come together, if only for their limited purpose of ousting the Congress. But they needed a credible and energetic backward candidate to head the union. Lalu Yadav was sent for.”
The trouble of course was that Lalu was no longer a student. He was an employee of the Patna Veterinary College by then. But then those were the seventies and the state was Bihar, so not being a student was a small problem that could be fixed.
As Thakur writes “Assured that the caste arithmetic was loaded against the Congress union, Lalu readily agreed to contest. He quietly buried his job at the Patna Veterinary College and got a backdated admission into the Patna Law College. He stood for elections and won. The non-Congress coalition in fact swept the polls.”
And this set up Lalu for the big league as the agitation launched by Jai Prakash Narayan, against Indira Gandhi, gathered speed. The next year i.e. 1974, the agitation against Indira Gandhi spread throughout the country. As Thakur writes, “An agitation committee was formed, the Bihar Chatra Sangharsh Samiti to co-ordinate the activities of various unions and Lalu Yadav as president of PUSU was chosen its chief.” These events catapulted Lalu Yadav into the big league from which he never looked back. He became a member of the Lok Sabha in 1977 at a very young age of 29. He became the Chief Minister of Bihar in 1990.
But the fact of the matter remains that he if he wasn’t asked to contest the 1973 PUSU elections, Lalu might have never returned to politics and probably retired by now from the Patna Veterinary College.
Lalu was lucky because he was at the right place at the right time. His sons are lucky because they are his sons. The next generation of politicians(even those who are not a part of electoral politics) is always luckier to that extent. They already have a base that has been built to work from.
But the question does the next generation respect this base because of which they get lucky? And they answer seems to be no, as a spate of recent examples show. Robert Vadra, with his land dealings in Haryana and Rajasthan, has been a huge embarrassment for Sonia Gandhi, her son Rahul and the Congress Party.
Sharad Pawar had to recently come to the rescue of his nephew Ajit, after he made insensitive comments in drought hit Maharashtra. Mamata Banerjee’s IIPM educated nephew Abhishek stands accused of running Ponzi schemes in West Bengal. News reports suggest that UP Chief Minister Akhilesh Yadav has been spending a lot of time trying to settle ‘who gets the government contract’ dispute between his step brother Prateek and his first cousins. Pawan Bansal, had to recently quit as the Union Railway Minister after the Central Bureau of Investigation (CBI) caught his nephew Vijay Singla for running a jobs for bribes racket in the Indian Railways.
And there are examples from the past as well. Atal Bihari Vajpayee’s spotless reputation as the Prime Minister of the country was marred by the dealings of his foster son-in-law Ranjan Bhattacharya. J Jayalalithaa’s weakness for her foster son V Sudhakaran tarred her reputation. The late Pramod Mahajan’s son Rahul was and continues to be an embarrassment.
The late Prime Minister PV Narsimha Rao’s son Prabhakar was accused of being involved in the urea scam in the 1990s. If we go back a little further, Moraji Desai, the fourth prime minister of India, had to deal with allegations of graft against his son Kanti Desai. Kanti Desai had allegedly collected Rs 80 lakh for party funds misusing his position as the PM’s son. Raj Narain a minister in Desai’s cabinet, even came up with the slogan “Hamse kya parda hai, Kantike haath mein garda hai (Why hide it from us, Kanti’s hands are muddied).”
Jagjivan Ram could have become the first dalit Prime Minister of independent India if he hadn’t been embarrassed by his son, Suresh Ram. Nude pictures of Suresh were published in a magazine called Surya, which was edited by Maneka Gandhi. The pictures showed him in a compromising position with a 21 year old student of Satyawati College, Delhi University, called Sushma Chaudhury, who he eventually married (On a slightly different note Suresh’s sister Meira Kumar is the speaker of the current Lok Sabha). “If the Kamasutra has 64 poses of making love, this one certainly had 10,” wrote Khuswant Singh in a later column, with regard to these pictures.
As veteran journalist and editor Inder Malhotra has been quoted as saying “In fact, in many ways Suresh Ram tried to emulate Sanjay Gandhi and received the same shelter from his father which Sanjay got from her mother. It was a game of one-upmanship.”
And Sanjay Gandhi, among all the sons, daughters and relatives of politicians, was the biggest embarrassment of them all. His dictatorial ways ensured that the Congress party was thrown out of power for the first time since independence in 1977 (For a detailed study on this Vinod Mehta’s The Sanjay Story is an excellent read). Indira Gandhi who was known to be very stern otherwise continued to be a mother when it came to Sanjay.
The broader point is that the politicians’ weakness and love for their progeny (or even other close relatives) puts them in embarrassing situations. At times, the progeny are acting as fronts for the shenanigans that the politicians indulge in and at times they are on their own. But in either condition there is a cost that is to be paid for.
A major reason that Lalu Prasad Yadav finally lost in Bihar was because of the shenanigans that his saalas (brothers in law) Sadhu Yadav and Subhash Yadav, indulged in. They had the political patronage of Rabri Devi, who was the Chief Minister of Bihar. News reports coming out now suggest that Lalu’s two sons are also not the best of buddies. And this can’t be good news for Lalu Yadav whose political fortunes have taken a huge beating since 2005.
All the politicians who promote their progeny in politics and allied areas, need to thank Indira Gandhi. If it wasn’t for her, politics in India would have never become a family owned business. As historian Ramachandra Guha said in a lecture titled Verdicts on Nehru: The Rise and Fall of a Reputation (Second V. K. R. V. Rao Memorial Lecture, Institute of Social and Economic Change, Bangalore, 20 January 2005) “After Nehru the Congress chose Lal Bahadur Shastri to become Prime Minister, a post on which he quickly stamped his authority. Mrs (Indira) Gandhi herself may never have become Prime Minister had not Shastri died unexpectedly. She was chosen by the Congress bosses as a compromise candidate who (they thought) would do their bidding. But once in office Mrs Gandhi converted the Indian National Congress into a family business. She first brought in her son Sanjay and, after his death, his brother Rajiv. In each case, it was made clear that the son would succeed Mrs Gandhi as head of Congress and head of Government. Thus, the ‘Nehru-Gandhi dynasty’ should properly be known as the ‘(Indira) Gandhi’ dynasty.”
India is still paying the costs of this monstrous mistake as almost all politicians now want to pass on the baton to their progeny and other relatives close to them. Professor Pulin Garg of Indian Institute of Management Ahmedabad used to say with regard to family owned businesses in India “Haweli ki umar saath saal ( a family owned business lasts for 60 years).” It will be interesting to see how long political hawelis last on an average? That will be a big determinant of which way India goes in the decades to come.
The article originally appeared on www.firstpost.com on May 17,2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)
If Sanjay Dutt is innocent, I am Amitabh Bachchan
Subhash Ghai’s Khalnayak with Sanjay Dutt in the lead role released on June 15, 1993. This was around two months after Dutt was first arrested on April 19, 1993, for his involvement in the Bombay bomb blasts which happened on March 12, 1993 (Bombay is now Mumbai). The story goes that Ghai had shot multiple ends for the movie, and after Dutt’s arrest he used the one which showed Ballu, the character played by Dutt, in a positive light.
That’s the thing with reel life, if the director does not like the end, he can change it. Real life should work a little differently, that’s what you and I might think. But it doesn’t always work like that. At least, not if you are Sanjay Dutt.
On March 21, 2013, the Supreme Court of India, convicted Dutt for illegal possession of arms and sentenced him to five years in prison. Between then and now a small cottage industry seems to have evolved which is trying to tell the world that Dutt is innocent and is trying to change the end of a long judicial process which has finally delivered some justice.
This cottage industry includes those working with him in the Hindi film industry. They cannot believe that Sanju Sir, as they like to call him, will have to go to jail. Rakhi Sawant, who is largely famous for what the Hindi film industry refers to as item numbers, has even volunteered to go to jail instead of Dutt. “If there is any provision in the law, then I’d like to request the court to send me to jail in place of Sanjay. Not because he is a big actor today, but because he has a family and kids at home to take care of,” she has remarked.
Support has also come in from Marakandey Katju, Chairman of the Press Council of India, who on other occasions has spoken out strongly against media’s obsession with celebrities. Katju is also a former judge of Supreme Court. He wants Sanjay Dutt to be pardoned.
He has offered various reasons for the same. In the last twenty years Dutt has suffered a lot. He had to take the permission of the Court for foreign shootings. He has two small children. And to top it Dutt has through his film revived the memory of Mahatma Gandhi and the message of Gandhiji, the father of the nation. Justice Katju in his appeal to grant pardon to Dutt had also said that “his parents Sunil Dutt and Nargis worked for the good of society and the nation.”
Congress General Secretary Digvijay Singh has jumped into the rescue Sanjay Dutt bandwagon as well. “Sanjay Dutt is not a criminal, he is not a terrorist. Sanjay Dutt, at a young age, in the atmosphere of that time, thought that perhaps the way Sunil Dutt had been raising his voice against communalism and favoured the minorities, then perhaps he could be attacked. So, as an obvious reaction of a kid to do something, if he has committed a mistake then I feel that he has undergone the punishment for it,” Singh said.
Mamata Banerjee, chief minister of West Bengal, who normally goes cholbe na cholbe na against everything, has also come out in support of Dutt. “Today, I fondly remember Sunil Dutt ji. He used to come to my residence whenever he was in Calcutta. If he were alive, he would have no doubt made all efforts to see that Sanjay does not suffer any more. My heart echoes the same sentiments ,” the Trinamool Congress chief wrote on Facebook, getting nostalgic.
Let me demolish this arguments one by one. In 1993, Sanjay Dutt was 33, going on 34. He was no kid, as Digvijay Singh makes him out to be. On the other hand Ajmal Kasab, who was recently hanged to death, was actually a kid, when he carried out the gruesome act that he did.
In the last twenty years Dutt has suffered a lot, feels Katju. But so has everyone else who was accused in the Mumbai bomb blasts case. Yusuf Memon, one of the accused, who will serving a life sentence, is schizophrenic and the Supreme Court dismissed his plea seeking relief from his conviction and life sentence.
During the last twenty years Dutt managed to marry twice (Rhea Pillai and now Manyata earlier known as Dilnawaz Sheikh ). So much for him suffering. And as far as kids go, if people were pardoned because they had kids, nobody in India would ever go to jail.
The movies Katju is talking about are Munnabhai MBBS and Lageraho Munnabhai. Dutt did not make these movies, he just acted in them. The movies were the vision of director Rajkumar Hirani, who also co-wrote them. In fact, Dutt was not even supposed to play the role of Munnabhai in Munnabhai MBBS. The original choice was Shah Rukh Khan, who later declined due to a back injury. So Sanjay Dutt was simply lucky to have first landed and then played the role which made Gandhi fashionable again. And that is no reason to let him go.
Digivijay Singh in his statement seems to be justifying Sanjay Dutt possessing illegal weapons for self defence. What he forgets is that we are not talking about some desi katta or a revolver here. We are talking about AK-56 rifles. Its worth remembering that the year was 1993 and not 2013. “And AKs were not weapons you almost ever saw outside some militant districts in Punjab and Kashmir,” writes Shekhar Gupta in a column in The Indian Express.
And as far as the nostalgia of Mamata Banerjee goes there are people who might still feel nostalgic about the late Head Constable Ibrahim Kaskar of Mumbai police. As S Hussain Zaidi writes in Dongri to Dubai – Six Decades of the Mumbai Mafia “In the predominantly Muslim stronghold of Dongri, Ibrahim’s baithak was the first place people went to if they had a problem. It was privy to everything-from people discussing their choking lavatory drain to the excitement of the elopement of lovers or cases of police harassment.” Kaskar’s son is Dawood Ibrahim. So should sons committing crimes be let go because their fathers happened to be nice men? Maybe Justice Katju and Mamata Banerjee can give us an answer to that.
In fact, it would be safe to say that Sanjay Dutt was very lucky not be convicted under the the Terrorist and Disruptive Activities (Prevention) Act (or what we better know as TADA). Dutt was arrested in 1993, for acquiring three AK-56s rifles, nine magazines, 450 cartridges and over 20 hand grenades. One doesn’t need so many weapons and ammunitions for self defence. This despite the fact that Dutt already had three licensed weapons. And when was the last time you heard anyone keeping hand grenades at home for self protection?
Some of these weapons were later stored at the home of a woman called Zaibunissa Kazi. This included two of the three AK-56s rifles that Dutt had got. Kazi was convicted under TADA. Same was the case with Baba Mussa Chauhan and Samir Hingora, who delivered the consignment of arms to Dutt’s house. And so was Manzoor Ahmed, whose car was used to ferry the arms out of Dutt’s residence.
But the special TADA court did not convict Dutt under TADA. This is very ironical given that those who got the arms to Dutt’s house were convicted under TADA. So was the women in whose house the arms were placed, after they were moved from Dutt’s house. He had also admitted to being directly in touch with Anees Ibrahim, the main conspirator Dawood Ibrahim’s younger brother. Further, CBI did not challenge the TADA court’s decision which relieved Dutt of charges under TADA, in the Supreme Court.
In fact Satish Manishinde, Dutt’s lawyer later admitted in front of a spy camera in a sting operation carried out by Tehehlka that “The moment she (Zaibunissa Kazi) was convicted, I thought Sanjay too would be convicted under TADA .” No wonder Kazi’s daughter feels “I wish I was a celebrity or my mother was a celebrity or a sister of an MP. Even my mother would have got the kind of support Sanjay Dutt is getting. If it is on humanitarian grounds then why only Sanjay Dutt, why not Zaibunisa. Isn’t she a human? Isn’t she a citizen of this country?”
As a line from the song Yaaram written by Gulzar, from the still to be released Ek Thi Daayan goes “koi khabar aayi na pasand to end badal denge”. Everyone who is trying to appeal for a pardon for Sanjay Dutt is trying to change the end of a long judicial process which has finally delivered some justice.
To conclude, let me say this loudly and emphatically, if Sanjay Dutt is innocent, then I am Amitabh Bachchan.
The article also appeared with a different headline on www.firstpost.com on March 29,2013.
(Vivek Kaul is a writer. He tweets @kaul_vivek. He can be reached at [email protected])
Cong trying to do a Romney in Gujarat by attacking Modi
The Congress campaign in Gujarat is getting desperate. Sample this.
“When it comes to GDP growth, Gujarat is lagging behind states like Bihar, Odhisa and Chhattishgarh,” the Union Commerce and Industry Minister Anand Sharma said while addressing a public meeting in Gandhinagar. “Narendra Modi says Gujarat is most progressive, but if you have been to other states, Bihar, Odisha and Chattisgarh are much ahead,” he added.
When Indian politicians start using terms like Gross Domestic Product growth with voters you know that they don’t have much else to talk about.
Data from the planning commission shows that the state gross domestic product (GDP) at current prices (which does not adjust for inflation) of Bihar, Odisha and Chattisgarh grew at the rates of 20.4%, 16% and 15.3% in 2011-2012.
In comparison Gujarat grew at 15.8%. So the economic growth (which is what the state GDP measures) of Bihar and Odisha was faster than that of Gujarat. But Gujarat grew faster than Chattisgarh.
But as the old saying goes we should be comparing Apples with Apples and not Apples with Oranges. And to add to that as one of my teachers used to say “percentages should be used carefully lest we draw the wrong conclusions”.
Let me deviate a little and give an example to explain what I am basically trying to say. Let us say you earn Rs 10,000 a month and your income jumps to Rs 20,000 a month, a gain of 100%. On the other hand let’s say you earn Rs 1 lakh a month and your income jumps to Rs 1.3 lakh a month, or a gain of 30%.
So even though the percentage gain in the first case is more, the absolute gain is more in the second case. Hence, when we are talking percentages it is important to keep the base number in mind. So Bihar did grow faster than Gujarat but it was because of what economists like to call the “base effect”.
Gujarat’s state GDP in 2010-2011 was Rs 5,13,173 crore. It went up by 15.8% to Rs 5,94,369 crore in 2011-2012. In comparison Bihar’s GDP for 2010-2011 was Rs 2,17,814 crore. And it grew by 20.4% to Rs 2,62,230 crore in 2011-2012.
The point being Bihar is growing on a lower base and that’s why the percentage growth is higher. The same argument holds for Odisha as well.
The other point that comes here is the population of the state. Bihar’s state GDP went up by Rs 44,416 crore to Rs 2,62,230 crore. This gain of Rs 44,416 crore was spread across a population of 10.38 crore people. This implies a gain of Rs 4,279 per individual who lived in Bihar.
Now let’s do the same calculation for the state of Gujarat. The GDP of the state went up by Rs 81,196 crore to Rs 5,94,369 crore. This gain of Rs 81,196 crore was spread across a population of Gujarat is 6.04 crore as per the 2011 census. Hence, this implies a gain Rs 13,447 per individual who lives in Gujarat.
This basically means that the growth in Gujarat at an individual level was three times that of Bihar in 2011-2012. Hence, Sharma’s argument that Bihar grew faster than Gujarat doesn’t really work.
And Sharma is not the only one attacking Modi. Ajay Maken, the youngest minister in the Union Cabinet alleged at a rally that the ruling BJP government was neck-deep in corruption in the name of development. Well that’s like the pot calling the kettle black. As has been proven time and over the last few years, India hasn’t seen a more corrupt government than the current UPA government ruling the country.
Mani Shankar Aiyer, a former minister in the UPA government, called Modi Ravana and asatya ka saudagar. He also called him a paani purush. Congress Rajya Sabha MP Hussain Dalwai, said “Modi is just a mouse before Sardar Vallabhbhai Patel”.
Bharat Solanki, Union Minister for Drinking Water and Sanitation, decided to beat all the abuses being hurled at Modi and termed him as “Nathuram Godse” and alleged that “under the BJP rule in Gandhi’s Gujarat not truth but lies carry more currency”.
Elections campaigns can get nasty. But the Congress doesn’t seem to have learned from its 2007 blunder when Sonia Gandhi called Modi a “maut ka saudagar”. While it might have sounded like a brilliant turn of phrase to the Congress speechwriter who wrote Sonia’s speech, it clearly backfired on the party.
The issue here is what does the Congress attack Narendra Modi with? Economic development as I showed above is healthy in Gujarat. It is one of the few states in the country which has a power surplus. The roads are ‘just’ fine and the cities are largely clean. Modi doesn’t really have any big corruption charges against him unlike the Congress government as well as the party.
So what do you do in a situation like this? You get personal and attack on Modi’s big blip, the 2002 riots in the state, and hope that it creates enough fear in the minds of the voter and he decides to vote for the Congress.
But does the issue really matter to the major portion of the voters in Gujarat? The answer is no. As Aakar Patel, a known Modi baiter, recently wrote in the Open magazine “Gujaratis like to think they are great nationalists. It doesn’t occur to them that India suffers every time they triumphantly keep memories of the massacre alive, by backing the man first unwilling or unable to stop it, now too incompetent to prosecute its participants. They are voting Caesar(i.e. Modi) back to power.”
Hence, Congress’ negative campaign isn’t really going to work. In fact, it might work in favour of Modi, who will continue to espouse the cause of Gujarati Asmita and portray himself as a lone gladiator taking on the Congress baddies.
Also negative campaigns do not really work. Take the case of the recent Presidential elections in the United States. Romney’s attacks on Obama got too personal towards the end of the campaign. Donald Trump, a Romney supporter, wanted to see the college records of Obama. The insinuation here was that Obama may got into college in America as a foreign exchange student from Indonesia. Trump also wanted access to Obama’s passport. The insinuation here was that would allow him (i.e Trump) to prove something Muslim about Obama.
As marketing guru Al Ries told me in a recent interview on Firstpost “Mitt Romney spent most of his time attacking Barack Obama. That’s the wrong strategy. What a politician needs to do is to offer a positive concept first and then point out that his or her opponent lacks this concept.”
Some of the biggest state elections in India have seen winning parties run extremely positive campaigns. Akhilesh Yadav ran the umeed ki cycle campaign in Uttar Pradesh and Mamata Banerjee ran the poriborton campaign in West Bengal. While they are busy making a mess of the states after coming to power, but then that is a different issue all together.
In comparison. the Congress party doesn’t really have any strategy in place when it comes to taking on Narendra Modi. And what it is doing clearly won’t work.
The article originally appeared on www.firstpost.com on November 12, 2012.
(Vivek Kaul is a writer. He can be reached at [email protected])
The Singh Talkies
One of my favourite Hollywood comedies is Mel Brooks’ Silent Movie made in 1976. As its name suggests, the film had no dialogue and the only audible word in the movie is spoken by Marcel Marceau, when he utters the word “No!” Rather ironically Marceau was one of the most famous mime artists of the era.
The Congress party led UPA in the last few years has been behaving in the opposite way.In the Congress movie every leader other than Prime Minister Manmohan Singh, the man at the top, had a dialogue. Singh chose to keep quiet rarely telling us what was going on inside his head, as his government moved from one scam to another.
But over the last two weeks he has suddenly found his voice, initiated a wave of reforms, from increasing the price of diesel by Rs 5 per litre to allowing foreign direct investment in the retail sector. “It will take courage and some risks but it should be our endeavour to ensure that it succeeds. The country deserves no less,” Singh said after the announcements were made.
He even addressed the nation and explained the rationale behind the decisions. The media went to town saying that Manmohan has got his mojo back. But the question is what has got our silent Prime Minister talking?
When Pranab Mukherjee presented the budget earlier this year he had projected a fiscal deficit of Rs 5,13,590 crore or 5.1% of the gross domestic product(GDP). Fiscal deficit is the difference between what the government earns and what it spends.
The projected fiscal deficit has gone all awry primarily because the price of oil has continued to remain high, despite a slowdown in the global economy. Currently, the price of the Indian basket of crude oil is at around $114.4 per barrel.
This wouldn’t have been a problem if the diesel, kerosene and cooking gas, would have been sold at their market price. But the Indian government hasn’t allowed that to happen over the years and has protected the consumers against the price rise. This means that the oil marketing companies (OMCs) Indian Oil, Bharat Petroleum and Hindustan Petroleum have had to sell diesel, kerosene and cooking gas at a loss.
The government needs to compensate these companies from the losses they incur, so that they don’t go bankrupt. These losses were close to touching Rs 1,90,000 crore, when the government decided to increase the price of diesel by Rs 5 per litre. Even after this increase the OMCs will lose over Rs 1,00,000 crore just on the sale of diesel this year. The total loss on diesel, kerosene and cooking gas is now estimated to be at Rs 1,67,000 crore. The OMCs are also losing around Rs 6 per litre on selling petrol, but the government doesn’t compensate them for this.
The government hadn’t budgeted for such huge losses on the oil front in the budget. The budgeted amount was a miniscule Rs 43,580 crore. Of this nearly Rs 38,500 crore was used to compensate the OMCs for losses made during the course of the lost financial year, leaving a little over Rs 5,000 crore to meet the losses for the current financial year.
The subsidies allocated for food and fertiliser are also likely to be not enough. In fact as per the Controller General of Accounts the fiscal deficit during the first four months of the year has already crossed half of the budgeted fiscal deficit of Rs 5,13,590 crore. This was a really worrying situation. More than that with tensions flaring up again in various countries in the Middle East, it is unlikely that the price of oil will come down in a hurry.
Given these reasons if the government had carried on in its current state there was a danger of the fiscal deficit crossing Rs 7,00,000 crore or 7% of the GDP. This is a situation which India has never had to face since the country first initiated and embraced economic reforms in July 1991. The fiscal deficit for the year 1990-1991 had stood at 8% of the GDP.
Reforms like allowing foreign investment in multi brand retailing will have an impact on economic growth over a very long period of time, if at all they do. Allowing foreign investors to pick up 49% stake in domestic airlines will also not have any immediate impact. But what is more important is the signals that these reforms send out to the market i.e. policy logjam that was holding economic growth back is over and the government is now in the mood for reforms.
As a result the rupee has appreciated against the dollar. One dollar was worth Rs 55.4 on September 14. Since then it has gained 3% to Rs 53.8. This will help in bringing the oil bill down. Oil is sold internationally in dollars. When one barrel costs $115 and one dollar is worth Rs 55.4, India pays Rs 6,371 per barrel. If one dollar is worth Rs 53.8, then India pays a lower Rs 6,187 per barrel. So an appreciating rupee brings down the oil bill, which in turn pushes down the fiscal deficit of the government.
The thirty share BSE Sensex has rallied by 2.9% to 18,542.3 points, from its close on September 13 to September 17. Nevertheless, even after these moves the actual fiscal deficit of the government will be substantially higher than the targeted Rs 5,13,590 crore. To bring that down the government needs to come up with more reforms so that the rupee continues to appreciate against the dollar and brings down the oil subsidy bill. The market rally also needs to continue, so that the government meets its disinvestment target of Rs 30,000 crore for the year. And on top of all this the government also needs to reign in the oil subsidy by gradually increasing prices of petrol, diesel, kerosene and cooking gas. Unless this happens, the government will continue to borrow more and this will keep interest rates high. Interest rates need to come down if businesses and consumers are to start borrowing again. This is necessary to revive economic growth, which has slowed down considerably.
If all this wasn’t enough we also need to hope that a certain Mrs G and Master G need to continue to understand that good economics also means good politics. If they switch off anytime now, Manmohan Singh is likely to go quiet again.
(A slightly different version of the article with a different headline appeared in the Asian Age/Deccan Chronicle on September 26, 2012. http://www.deccanchronicle.com/editorial/dc-comment/good-economics-good-politics-too-426)
(Vivek Kaul is a Mumbai based writer. He can be reached at [email protected])
Mamata is only doing what Congress has always done
Mamata Banerjee has been severely criticised for quitting the Congress led United Progressive Alliance (UPA) government. The major reason for the same is the fact that the government of West Bengal is in a financial mess. As on March 31, 2012, the debt burden of the government stood at Rs 2,08,382.58 crore. To repay this loan the government needs to pay interest and principal amounting to Rs 23,200 crore during the course of this financial year (i.e. between April 1, 2012 and March 31, 2012).
As an article in the Business Standard points out “West Bengal’s outstanding debt by the end of this financial year is slated to be about Rs 2,26,000 crore , making it the most indebted state in the country in terms of debt to gross state domestic product ratio at close to 39 per cent.” (You can read the complete article here)
This huge debt is a legacy of nearly three and a half decade of misrule by the Left Front. “The Left believed that the key to power was to co-opt every section of society – school and college teachers, bus drivers, municipal employees, healthcare workers and so on – into government. So, the Bengal government is one of the largest employers in the country today,” writes Abheek Barman in an editorial in the Times of India. (You can read the complete piece here).
Given this, the expenses of the government of West Bengal are higher than its revenues. The difference it has to meet by borrowing. The revenue that the government expects to earn this year stands at Rs 76,943 crore. The expenses are at Rs 83,801 crore, leaving a deficit of Rs 6,585 crore.
The government of West Bengal had been negotiating with the government of India for a debt relief package. “When President Pranab Mujkherjee was the Union finance minister, both Mitra(Amit Mitra, the finance minister of West Bengal) and chief minister Mamata Banerjee had lined up for countless meetings in the hope of a financial package. “During the last 11 months, I have met the Prime Minister ten times and finance minister 20 times,” Banerjee had earlier said,” the Business Standard points out.
The government of West Bengal was hoping that the government of India allows the state to skip interest payment and principal repayments amounting to around Rs 22,000 crore, for each of the next three years. It also wanted its debt restructured with the interest rate on the debt being lowered as well as the repayment tenure being extended.
This relief programme would have helped the government of West Bengal to fix the state’s economy to some extent. It would have given them money to spend on the state’s infrastructure rather than just about being able to pay salaries to its employees. As Barman writes “People who voted for Mamata and her Trinamool Congress had hoped that she would fix Bengal’s broken economy, attract investment and jobs back to the state and repair its broken finances. A key component of the recovery plan was the debt-relief programme.”
Also with the withdrawal of support to UPA, Trinamool has had to give up the Railways Ministry which is one of the biggest job creators in the government. And it is a well known fact that Railway Ministers do influence jobs towards states they come from
With this background in mind the prevalent opinion is that Mamata has shot herself in the foot. Critics are also of the opinion that if she was so against foreign direct investment in multi-brand foreign retailing then she had the option of not allowing it in West Bengal. The Press Note allowing multi-brand foreign retailing clearly points out that “the State GovernmentslUnion Territories would be free to take their own decisions in regard to implementation of the policy.”
Also after all this any debt relief package for West Bengal, from the government of India, clearly won’t see the light of day. Nitish Kumar, the chief minister of Bihar, clearly saw an opportunity here and threw his hat into the ring. He said that his party (the Samta party) would support anyone who would come up with a package for Bihar.
Mamata Banerjee has had a very edgy relationship with the Congress since she quit the party and formed her own party, the Trinamool Congress on January 1, 1998. Given this her past behaviour with the grand old political party of India has appeared to be fairly whimsical.
She has often been accused of thinking with her heart and letting her emotions override her decisions rather than thinking with her head and making cold and calculated political decisions.
But what people forget very easily is that Mamata Banerjee is the only woman political leader of some standing in India who has risen on her own, without the support of any male or for that matter family.
As Monobina Gupta writes in Didi – A Political Biography “In fact, viewed through gender lens, Mamata’s story does indeed stand apart from the narratives of India’s most powerful contemporary women leaders. Says Krishna Bose “Mamata has not been the widow, the wife, daughter of companion of somebody.’ Just pick three top women leaders in Indian politics today – Sonia Gandhi, Mayawati, J.Jayalalithaa – each has had a prop, a male guardian of compelling power, or a lineage or redoubtable political growth.”
Mamata has clearly made it of her own and understands the games that people play in politics very well. As Gupta writes “Even when Rajiv Gandhi was alive, Mamata found herself in the company of Congressmen liaising with senior party leaders in Delhi, plotting to sabotage her career to crash her soaring political ambitions to the ground. In the void following Rajiv’s death, Mamata was left to defend herself against plots and counter-plots often real, sometimes imaginary, hatched by her own party leaders to pull her down.”
Mamata Banerjee may not understand economics. She may not be fit to govern. But she does understand what politics is all about. And given that the decision to withdraw support to the Congress led UPA government at the centre was nothing but a cold and a calculated chance that she is taking.
And how is that? Before I answer that let me deviate a little to discuss something that Gurucharan Das writes about in his new book India Grows At Night. As he writes “There are two spaces in the politics of India and one of them is largely empty. They reflect the classic division between those who look ahead and aspire versus those who look back and complain. India’s political parties still tend to cater to the second – to the victim in us – through their politics of grievance.”
Leading this list is the Congress party. “The Congress appeals to the victim in policies for the aam aadmi…with an ever expanding menu of job guarantees, food security and subsidy for gas diesel, kerosene, fertilizers and more…All this is about the politics of grievance…grievance admittedly can be a powerful motivator to action.”
This has put India in an economic mess and has forced the Congress led UPA to suddenly turn reformist. As Pratap Bhanu Mehta writes in the Indian Express “these reforms are coming after four years of colossal mismanagement is making the reform narrative problematic…politically it is not easy for the government, after running all fiscal responsibility into the ground for four years, and after stoking structural inflation, to turn back and accuse opponents of being populist.”
Given this Mamata is only doing what Congress has done all these years. She is practicing the politics of grievance and appealing to the victim in us i.e. the voters. She is trying to project herself on the national stage, as someone who cares about the poor and the not so well off. With the Congress talking reforms someone has to fill the space that has been left empty for the time being.
And how does that help Mamata and the Trinamool Congress? The panchayat polls in West Bengal slated for May next year could be advanced to the coming winter months. Mamata is appealing to the victim in the voters, by asking for a partial repeal in the diesel price hike and an increase in the number of subsidised cooking gas cylinders, which the government of India has limited to six.
She is also trying to influence the traders and the small shopkeepers by projecting FDI in multi-brand foreign retailing as a devil and asking for it to be squashed. A victory in the panchayat elections would really make Trinamool Congress stand true to its name.
The word Trinamool means grass-root. And currently the Trinamool Congress only controls two out of the seventeen zila parishads in the state. A victory here for the Trinamool Congress would be a further dent to the Left parties in West Bengal and would help consolidate Mamata’s position.
Also any instability in Delhi benefits Mamata and Trinamool. The party currently has 19 out of the 42 Lok Sabha seats in West Bengal. An early Lok Sabha election will clearly benefit Trinamool. Hence by withdrawing support Mamata is trying to destabilise the Congress led UPA government, and hoping that UPA loses its majority in the Lok Sabha.
If an early Lok Sabha poll does happen and the Trinamool Congress does get 30-35 seats, then Mamata Banerjee will clearly become an important player in the so called “fourth” or “federal” front that is now being talked about. It is a likely coalition of strong chief ministers like Nitish Kumar (who runs the Samta party), Naveen Patnaik (who runs the Biju Janta Dal), J Jayalalithaa(who runs the AIADMK) and Mamata.
This could mean that Mamata Banerjee could end up playing a very important role in the government of India. If the sleepy HD Deve Gowda could become the Prime Minister of India, why can’t Mamata Banerjee? That is the game at play.
And what about West Bengal? Well for a state that has gone through 35 years of mis-governance and is an economic mess, can surely wait for a few years more. In the meanwhile, their Didi is meant for bigger things.
(The piece originally appeared with a different headline on www.firstpost.com on September 22, 2012 http://www.firstpost.com/politics/mamata-may-be-trying-to-out-sonia-sonia-for-bigger-stakes-464467.html)
(Vivek Kaul is a writer and can be reached at [email protected])