{"id":464,"date":"2012-06-16T08:51:09","date_gmt":"2012-06-16T08:51:09","guid":{"rendered":"http:\/\/teekhapan.wordpress.com\/?p=464"},"modified":"2012-06-16T08:51:09","modified_gmt":"2012-06-16T08:51:09","slug":"is-manmohan-following-lalus-no-growth-bihar-strategy","status":"publish","type":"post","link":"https:\/\/vivekkaul.com\/2012\/06\/16\/is-manmohan-following-lalus-no-growth-bihar-strategy\/","title":{"rendered":"Is Manmohan following Lalu\u2019s no-growth Bihar strategy?"},"content":{"rendered":"

\"\"<\/a>
\nVivek Kaul
\n<\/strong>
\nIn a piece titled Farewell to Incredible India<\/em>, which deals with the current economic problems in India, The Economist<\/em> writes: \u201cThe Congress-led coalition government, with Brezhnev-grade complacency, insists things will bounce back.\u201d
\nLeonid Brezhnev was the General Secretary of the Central Committee (CC) of the Communist Party of the Soviet Union (CPSU). He ruled the country from 1964 till his death in 1982.
\nI guess The Economist looked too far. They could have found someone right here in India to describe the complacency of the Manmohan Singh-led United Progressive Alliance(UPA) government. The man I am talking about is none other than Lalu Prasad, the former railway minister and former chief minister of Bihar.
\nYes, you read it right. Before I get into explaining why I just said what I did, let us go back a little into history.
\nThe lucky Lalu Yadav<\/strong>
\nLalu Yadav re-entered politics in 1973, just by sheer chance. He didn\u2019t have to struggle for it. The opportunity just fell into his lap.
\nAs Sankarshan Thakur writes in Subaltern Sahib: Bihar and the Making of Lalu Yadav<\/em>, \u201cOn 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.\u201d
\nThe only trouble was that Lalu Yadav was no longer a student, but was an employee of the Patna Veterinary College. He had quit student politics in 1970, after having lost the election for the presidentship of PUSU to a Congress candidate. Before this, Lalu had been the general secretary of PUSU for three consecutive years.
\nBut Lalu got around the problem. \u201cAssured 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,\u201d writes Thakur.
\nAnd from there on Lalu Yadav went from strength to strength. In 1974, the students\u2019 agitation against then prime minister Indira Gandhi spread throughout the country. As Thakur points out, \u201cAn agitation committee was formed, the Bihar Chatra Sangharsh Samiti to coordinate the activities of various unions and Lalu Yadav as president of PUSU was chosen its chief.\u201d
\nThese events catapulted Lalu Yadav into the big league. In the 1977 elections, Lalu was elected to the Lok Sabha as a Janata Party candidate at a young age of 29.
\nChief Minister of Bihar<\/strong>
\nVS Naipaul once described Bihar as \u201cthe place where civilisation ends\u201d. Lalu Prasad first became the chief minister of Bihar in 1990. Between him and his wife Rabri Devi they largely ruled the state till 2005, and almost brought civilisation to an end.
\nWhen India was going from strength to strength with economic growth rates that it had never seen before, the economy of Bihar was shrinking in size. As Ruchir Sharma writes in Breakout Nations \u2013 In Pursuit of the Next Economic Miracles <\/em>, \u201cBihar was the only Indian state that not only sat out India\u2019s first growth spurt but also saw its economy shrink (by 9 percent) between 1980 and 2003.\u201d
\nLalu and his wife Rabri ruled for the major portion of the period between 1980 and 2003. Economic development was nowhere in the agenda of Lalu and on several occasions when questioned about the lack of economic development in the state, he replied that economic development does not get votes. And he was proved right.
\nIn fact such was Lalu\u2019s lack of belief in development that even money allocated to the state government by the Central government remained unspent. As Santhosh Mathew and Mick Moore write in a research paper titled State Incapacity by Design: Understanding the Bihar Story<\/em>, \u201cDespite the poverty of the state, the governments led by Lalu Prasad signally failed to spend the money actually available to them: \u2018\u2026Bihar has the country\u2019s lowest utilisation rate for centrally funded programs, and it is estimated that the state forfeited one-fifth of central plan assistance during 1997\u20132000.\u2019\u201d
\nBetween 1997 and 2005, the Ministry of Rural Development allocated Rs 9,600 crore. Of this, nearly Rs 2,200 crore was not drawn. And of the money received only 64 percent was spent. Similarly, money allocated from other programmes was also not spent.
\nHow did he survive?<\/strong>
\nLalu survived by building a potent combination of MY (Muslim + Yadav) voters. The Yadavs are the single largest caste in Bihar. Such was his faith in the MY voters that Lalu did not even promise development, like most politicians tend to do. As Mathew and Moore write: \u201cHe finessed this problem\u2026by departing from the normal practices of Indian electoral politics and not vigorously promising \u2018development\u2019. For example, if during his many trips to villages he was asked to provide better roads, he would tend to question whether roads were really of much benefit to ordinary villagers, and suggest that the real beneficiaries would be contractors and the wealthy, powerful people who had cars. He typically required a large escort of senior public officials on these visits, and would require them to line up dutifully and humbly on display while he himself was doing his best to behave like a villager. He might gesture at this line-up and ask \u2018Do you really want a road so that people like this can speed through your village in their big cars?\u2019\u201d
\nSo what was Lalu Yadav trying to do here? \u201cLalu Prasad Yadav was not trying to fool most of his voters most of the time. He was offering then tangible benefits: respect (izzat<\/em> \u2013 a Hindi term that he employed frequently) and the end of local socio-political tyrannies
\nWhere does Manmohan Singh fit in here?<\/strong>
\nSome time after Lalu Yadav became the chief minister of Bihar, India had a financial crisis. PV Narasimha Rao was looking for a technocrat for the Finance Minister\u2019s position. He first approached Dr Indraprasad Gordhanbhai Patel, who was the Governor of the Reserve Bank of India(RBI) from 1977 to 1982. Patel refused and suggested the name of his successor at the RBI, Manmohan Singh, who had been the Governor of the RBI from 1982 to 1985. Singh had just taken over as the Chairman of the University Grants Commission (UGC) in March 1991. He was pulled out of there and made the Finance Minister of India. And thus started Singh\u2019s second career. Like Lalu, Singh\u2019s career got a second life.
\nAnd he, like Lalu, before him went from strength to strength and finally became the Prime Minister of India. A few days ago, Mamata Banerjee had even proposed his name for President. He would make for an excellent President given that the Indian President doesn\u2019t really do anything, except what the government (in this case Sonia) wants him to.
\nIf Pratibha Patil, who no one had ever heard of, could become the President of India, so can the much more loyal Manmohan. He fits all the parameters Sonia Gandhi is looking for in a President. But the trouble, of course, is she wants the same parameters in her Prime Minister as well. And he can\u2019t be at two places at the same time. So Singh\u2019s name as a presidential candidate has been rejected by the Congress party. It would have been a rather glorious end to an \u201cillustrious\u201d career.
\nThe irony<\/strong>
\nHowever what is ironic is that a man, who once spearheaded the economic reform process in India, has now totally withdrawn himself from the same. In fact, at times one wonders whether it is even a priority with him and his government? Now that Pranab Mukherjee is leaving the finance ministry for Rashtrapati Bhawan, we will find out what Manmohan has in store.
\nThere has hardly been any response from the UPA government to the recent low GDP growth rate number of 5.3 percent for the period between January and March 2012. Pranab Mukherjee has blamed the slow growth on the problems in Greece in particular and Europe in general. This is a typical Lalu response where the old adage \u201cif you can\u2019t convince them, confuse them\u201d is at work. The problems of India are not because of problems in Greece or Europe, but because of the economic policies of the Manmohan Singh-led UPA government. (It\u2019s not Greece: Cong policies responsible for rupee crash).
\nAs The Economist<\/em> puts it, \u201cIndia\u2019s slowdown is due mainly to problems at home and has been looming for a while. The state is borrowing too much, crowding out private firms and keeping inflation high. It has not passed a big reform for years. Graft, confusion and red tape have infuriated domestic businesses and harmed investment. A high-handed view of foreign investors has made a big current-account deficit harder to finance, and the rupee has plunged.\u201d
\nIn fact, there is a state of total denial within the UPA that there are serious economic problems facing India. The spin-doctors of UPA are even working overtime to sell the country that famous song from 3 Idiots \u201cAll is Well\u201c. On a recent TV show, Montek Singh Ahulwalia, the deputy chairman of the Planning Commission, kept insisting that a 7 percent economic growth rate was a given. As it turned out the GDP growth rate fell to 5.3 percent.
\nEconomic development doesn\u2019t matter<\/em>
\nThe way the UPA government has been working over the last few years, it is very easy to conclude that economic development of this country isn\u2019t really top of the agenda. Like was the case with Lalu Yadav.
\nThe solutions to the problems are simple and largely agreed upon by everyone who has an informed opinion on the issue. As The Economist puts it, \u201cThe remedies, agreed on not just by foreign investors and liberal newspapers but also by Manmohan Singh\u2019s government are blindingly obvious. A combined budget deficit of nearly a tenth of GDP must be tamed, particularly by cutting wasteful fuel subsidies. India must reform tax and foreign-investment rules. It must speed up big industrial and infrastructure projects. It must confront corruption. None of these tasks is insurmountable. Most are supposedly government policy.\u201d
\nBut then there is hardly any policy coming out of the government. So what is top of the agenda? To stay in power and enjoy its fruits? And by the time the 2014 elections come around, set the stage ready for Rahul Gandhi to take over? But the question that crops up here is this: like Lalu, does the Manmohan Singh-led UPA have a MY formula? And even if it does have a formula, will it work?
\nLalu found out in 2005 that formulas become useless over a period of time. \u201cWe could not make it because of overconfidence and division in Muslim-Yadav (votes),\u201d Lalu told India Today<\/em> magazine after his defeat to Nitish Kumar in the 2005 election.
\nOverconfidence is the word the Manmohan Singh led UPA needs to watch out for.
\n(The article originally appeared on www.firstpost.com on June 16,2012. http:\/\/www.firstpost.com\/politics\/is-manmohan-following-lalus-no-growth-bihar-strategy-345933.html<\/a>)
\n(Vivek Kaul is a writer and can be reached at vivek.kaul@gmail.com)
\n<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Vivek Kaul In a piece titled Farewell to Incredible India, which deals with the current economic problems in India, The Economist writes: \u201cThe Congress-led coalition government, with Brezhnev-grade complacency, insists things will bounce back.\u201d Leonid Brezhnev was the General Secretary of the Central Committee (CC) of the Communist Party of the Soviet Union (CPSU). He … <\/p>\n

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