Coalition politics and regional identities

By V.Y. Kantak

Whereas many individuals belonging to the two largest political parties in India-the Bharatiya Janata Party and the Indian National Congress-often argue that the country's polity is essentially bipolar and that smaller parties have no alternative but to align themselves with one or the other "poles", the reality on the ground is far more complex. It can be contended that the process of fragmentation of the polity is not yet over and that smaller parties, including regional and caste-based outfits, do not necessarily have to become appendages of either the BJP or the Congress.

The rise of the BJP is seen as a process of the party occupying the centrist political space vacated by the Congress. Though this viewpoint is common, the reality is far more complicated. It is true that the period that witnessed the fastest growth of the BJP as an electoral force has coincided with the phase of the most rapid decline of the Congress-that is perhaps why the two phenomena are seen as correlated. However, what such a viewpoint misses is the fact that in areas where the Congress has been almost completely marginalised, it has been displaced not so much by the BJP as by smaller regional parties.

The marginalisation of the Congress in UP has not led to the BJP becoming a party with unquestioned dominance in the state. On the contrary, the party was reduced to third position in UP, behind the Samajwadi Party and the Bahujan Samaj Party in the recent Assembly elections. In Bihar, the Congress has been reduced to a marginal presence over the last decade-and-a-half, but its decline has not led to the BJP becoming the dominant party. Mr. Laloo Prasad Yadav's Rashtriya Janata Dal or its forerunner, the Janata Dal, were the main agents of the erosion of the Congress Party's vote banks while the Samata Party-itself a breakaway group of erstwhile JD-has a strength in Bihar that is equal to if no more than the BJP.

Could UP and Bihar represent the exception to the rule that the BJP grows to fill the vacuum created by a shrinking Congress? Not quite. In Orissa, Assam and Karnataka, for instance, the BJP has grown rapidly, more often than not by consolidating the anti-Congress political forces. It is another matter that other anti-Congress groups-such as the Janata Dal (United) in Karnataka, the Biju Janata Dal in Orissa and the Asom Gana Parishad in Assam-have at some stage decided that rather than compete with the BJP for the Opposition space, they could gain by aligning with the party.

If one looks at the period between the late-1960s and the mid-1980s, there were already signs of the Congress losing ground gradually to regional parties. The most obvious example would be Tamil Nadu, where the Congress today has little choice but to align with one or the other of the two main Dravidian parties in the state-the DMK or the AIADMK. But Tamil Nadu is not the only example.

Andhra Pradesh and Maharashtra, traditional strongholds of the Congress, witnessed similar trends even if the process did not lead to the complete marginalisation of the Congress. In Andhra Pradesh, the Telugu Desam Party rose from almost nowhere to become a powerful challenge to the Congress in the mid-1980s and has remained the main contender for power with the Congress. Similarly, in Maharashtra it was the rise of the Shiv Sena followed by NCP rather than the BJP, which first raised questions about just how firm the Congress' grip on power in the state was.

In other words, the decline of the Congress has not automatically resulted in the rise of the BJP; put differently, the political tussle between the two largest political parties in India has not been a zero sum game in which the losses of one inevitably results in the other gaining by filling a so-called political vacuum.

Several political scientists have analysed the phenomenon of 'identity politics', and they contend that the benefits of the Nehruvian model of economic development remained confined to a section consisting of the bourgeoisie, high managerial elites, state bureaucracy and agrarian magnates and that this fostered resentment in the vast majority of the population.

It is this resentment that has been tapped by various political groups leading to the fragmentation of the polity. The resentment against the elite extends to a rejection of all that the elite stood for, including the notion of the Indian identity over-riding sub-national identities. Since this elite speaks the language of national integration and unity, the latter (movements of the non-elite) speak the negative language of localism, regional autonomy, small-scale nationalism, in dystopias of ethnicity-small xenophobic, homogeneous, political communities.

The world of political possibilities in India seems to be simplifying into the frightening choice before most of the modern world's political communities: to try to craft imperfect democratic rules by which increasingly mixed groups of people can carry on together an unheroic everyday existence, or the illusion of a permanent and homogeneous, unmixed single nation, a single collective self without any trace of a defiling otherness.

The fragmentation of India's polity is undoubtedly an outcome of the feeling among very large sections of the population that they had been left out of the development process. What is interesting, however, is that this resentment has not always manifested itself through parties and groups that claim to be speaking for the excluded sections of society.

The fragmentation of India's polity, then, can be seen as the result of various sections deciding that an informal coalition like the Congress had failed to serve their interests. But what explains the tendency for coalitions to persist? It could well be the case that these sections perceive themselves as having gained from a process of explicit coalitions in which groups ostensibly speak for them.

It is pointless, in this context, to debate whether Yadavs as whole have actually gained because of the SP or the RJD, whether Dalits are better off since the BSP was formed or whether Andhra Pradesh and Maharashtra have performed better after the formation of the TDP and the Shiv Sena. What matters is the popular perception among the relevant sections that their interests are being taken care of better than in the past. INAV

Analyzing Pakistan elections

By D Suba Chandran

Despite numerous criticisms and cynicisms before February 18, the elections to the National and four Provincial Assemblies were held relatively free and fair. And the results are there to see for everyone. The PPP secured maximum number of elected seats - 88 for the National Assembly, followed by the PML-N with 66 seats. With PPP and PML-N likely to form a coalition government, it is important to analyze the elections, in terms of who voted for whom; for what reasons; and what do they imply.

First, the return of PPP as a leading political party at the national and provincial levels. The importance of PPP securing maximum number of seats is significant; but what is more important is the manner in which it has secured those seats. These 88 seats for the National Assembly are secured from all the four provinces, and not from one or two major provinces such as Sindh or Punjab. While Sindh has been a traditional stronghold for the PPP, for the Bhuttos are from this province, over the last two decades, the PPP has been steadily declining in other provinces. February 18 elections have reversed this trend. The PPP has secured 77 seats for the Sindh provincial assembly, 66 for the Punjab provincial assembly, 18 for the NWFP and 7 for Balochistan assembly. Thus, PPP is likely to form the government in Sindh, besides supporting a coalition in Punjab and the NWFP.

Second, the PML-N overthrowing the PML-Q from Punjab, thereby also from the national scene. More than the performance of the PPP, it is PML-N's performance in Punjab, which has been critical in changing the outcome of this election. Consider the following facts: before the elections, unlike Benazir Bhutto, the Sharif brothers had no contacts with Pervez Musharraf and there was no deal for their return. When Nawaz Sharif returned last year, he was immediately deported. When Benazir returned to Pakistan last October, every one believed there was an understanding between her and Musharraf. On the other hand, the Sharif brothers returned against Musharraf's will, thanks to the intervention by the Supreme Court. Also, at the international level, (read from the US) there was more backing for Benazir than Nawaz. Finally, the assassination of Benazir, created a sympathy wave for the PPP, whereas for the PML-N, there was only the strength of the Sharifs and the anti-Musharraf sentiments in Punjab. Given the above circumstances, the performance of the PML-N in Punjab is commendable.

More importantly, the performance of the PML-N is significant from another perspective. The PML-N has bulldozed the chances of the PML-Q, the King's party, thereby demolishing the grand designs of Pervez Musharraf. Though PML-N has failed to get substantial seats for the National Assembly from other three provinces, those 60 plus seats it has secured from Punjab along with PPP has made sure that the PML-Q could neither form a government at national level, nor in the province of Punjab. With the PML-N securing 102 seats for the Punjab Assembly, it is likely to form the government with PPP's support, which has secured 77. With a mere 66 seats, the PML-Q has to sit quietly in the opposition benches in Punjab.

Third, the routing of the PML-Q, the much favoured King's Party. From close to 120 seats in the 2002 elections, the PML-Q's fall has been substantial. In this election, it has been able to secure only 38 seats for the National Assembly. Most of its leaders were defeated in the elections, in their own backyards. The biggest defeat, was that of the Chaudhrys of Gujarat, who were the main leaders of the PML-Q. Chaudhy Shujaat Hussain lost in his home constituency in Gujarat; and Sheikh Rashid, a close confidante of Musharraf lost his traditional stronghold- Rawalpindi, considered to be the garrison city, for the overwheliming presence of military. Some of the other prominent PMLQ leaders who lost this election include Rao Sikandar Iqbal, Sher Afgan Niazi and Khurshid Mehmood Kasuri. All of them formed - Who is Who in the previous government.

Fourth, the electoral massacre of the religious parties - led by the Muttahida Majlis Amal (MMA). Like that of the PML-Q, their fall from power is yet another important aspect of February 2008 elections - both at the national and provincial levels. In 2002 elections, the MMA surprised everyone by capturing 13 percentage of the total votes polled; it succeeded in securing 59 seats for the National Assembly; 50 plus seats in the NWFP Assembly and 14 seats in Balochistan Assembly. Besides forming the government in NWFP, the MMA also formed a coalition government with the PML-Q in Balochistan.

The 2008 elections should be a total shock to the religious parties. They could secure only 5 seats for the National Assembly. More than the fall at the national level, the dramatic decline in the NWFP should be a total shock. Consider the fact, the MMA after the 2002 elections had formed the government and ruled the NWFP for the last five years. Many expected that the ongoing War on Terrorism in the Federally Administered Tribal Agencies (FATA) and the pashtun hostility vis-à-vis Islamabad and Musharraf was likely to help the MMA in the NWFP. Unfortunately for the MMA, the 2008 elections have thrown them out of electoral reckoning. It has succeeded in securing only 8 seats for the NWFP Assembly and 5 for Balochistan Assembly.

Fifth, is the return of the Awami National Party (ANP) in the NWFP. In fact, the regional parties and independent candidates from the smaller provinces, except Balochistan have performed reasonably well in the 2008 elections. The ANP has secured 10 seats for the National Assembly from the NWFP and more importantly, 29 seats for the provincial assembly. The ANP is a moderate secular party which believes is democratic politics and political engagement and dialogue. ANP's political performance in the 2008 elections and its likely role in the political governance of this highly volatile region is likely to become an important factor in War on Terrorism. In Sindh, the MQM has been successful in retaining its vote bank. In fact, it has secured few seats more than, what it had in the previous elections. Thus, MQM is the only party that has been able to withstand the anti-Musharraf wave.

Finally, this election is, clearly a vote against Musharraf. While the assassination of Benazir Bhutto could have played an important role in the electoral performance of the PPP in Sindh, the overall performance mainstream political parties at the national level are a clear indication that the common population in all the four provinces has rejected Pervez Musharraf's policies and those parties and individuals whom he supported. The victors should realize this important aspect of the elections. There have been efforts from those close to Musharraf, to form a coalition led by the PPP, supported by the PML-Q, MQM and independents. In theory, such a government could be formed at national and regional levels, and keep the PML-N away. If the PPP is to fall for such a move, it would negate the very purpose of this elections. For the vote in this election is not only pro-mainstream parties led by the PPP and PMl-N, but also the vote is against Musharraf.

Challenges for inclusive growth

By S.Sethuraman

Apart from the signs of a growth deceleration in the domestic economy, India, with all its strong fundamentals and resilience, cannot regard itself immune to the continuing instability in global financial markets and the steep rise in prices of oil, food and metals.

Economic Outlook

The world economic scene is no longer as benign as it was in recent years, which saw many countries moving to a higher growth path in conditions of low interest rates and low inflation. These conditions were as much favourable to emerging economies as the world as a whole. In mid-2007, the scenario changed dramatically after financial market turmoils. Shri Chidambaram has thus to formulate a budget strategy which not only helps to keep India secure on a robust growth path, notwithstanding the signs of moderation in industry and services at home, but also ensure that emerging inflationary pressures are well contained.

While India’s overall outlook is positive for macro-economic stability, 2008-09 is expected to be a year of relative growth slowdown, mostly from the spillover effects of the weakening of the global economic momentum and volatile financial markets. The United States, global growth engine, is moving into recessionary conditions and this would affect trade and capital flows for developing countries, which could see a drop in American demand for their exports and services.

After two successive years of GDP rising by 9.4 and 9.6 per cent, India’s growth is set to slowdown to 8.75 per cent in 2007-08, according to IMF, and further moderate to 8.25 per cent in 2008-09. The Central Statistical Organisation (CSO) which provisionally estimated growth to have gone up to 9.6 per cent in 2006-07, has also lowered the advance estimate for 2007-08 to 8.7 per cent, similar to the IMF projection.

The downward revision is mainly attributed to agriculture growth weakening to 2.6 per cent in 2007-08 from the previous year’s 3.8 per cent and the deceleration trends in the manufacturing sector. At the same time, the annual rate of inflation, which declined from around 6 per cent at the end of March 2007 to 3.5 per cent at the start of New Year, had crossed the 4 per cent benchmark to register 4.11 per cent by the end of January.

Popular Expectations

Demands for a populist budget are focused on raising incomes for farmers, basic services and other benefits for poorer sections and providing jobs and skills training for youth. Both the Prime Minister Dr Manmohan Singh and the Finance Minister have spoken of the urgency of providing significant relief to indebted farmers and on measures to boost agriculture and raise rural incomes. Equally, they have emphasized the importance of education and skills for the growing numbers of youth in the country. All of this should find reflected in the forthcoming Budget.

While aiming at growth of about 9 per cent with control over prices, Shri Chidambaram cannot ignore the pressures for a people-friendly budget, which would appeal to the people as one meeting their aspirations for a better life.

Besides debt waiver and other relief measures for farmers, the budget is expected to embody several new initiatives already taken by Government in the matter of old age pension and social security for unorganized workers. The rural employment guarantee programme is now countrywide and what is required is its effective, accountable, implementation.

A growth of the order of not less than 9 per cent would certainly generate more resources for raising public investments in infrastructure and the allocations for all social development programmes designed to spread the benefits of growth. Fiscal policy has also to be geared to holding the price level. "We will not lift the vigil on prices" Shri Chidambaram has said, and the strategy would be to balance growth and inflation.

In view of price pressures in the economy, the Reserve Bank has kept interest rates unchanged for the present. The Prime Minister’s Economic Advisory Council headed by Dr.C.Rangarajan, while revising the growth estimate for the current year from 9 to 8.9 per cent and projecting 8.5 per cent in 2008-09, points out managing inflation will be a major challenge in the coming year.

Inclusive Growth

Since agriculture holds the key to food self-sufficiency, rural incomes and relative stability in prices, the budget package for farmers is expected to provide for waiver of debt for smaller farmers, a moratorium on interest payments, lowering of farm credit rates and a range of measures to improve farm productivity. The Finance Minister has emphasized the importance of 4 per cent growth in agriculture for sustained GDP growth at 9 to 10 per cent per annum. The budget will address agriculture and the well being of rural population with a significant step-up in allocations for agriculture-related activities and for health, education and other rural infrastructure services. Both agriculture and education are likely to get strong impetus from the budget.

Government’s success so far in fiscal consolidation, helped by the revenue buoyancy, of the last two years, has enabled it to make enhanced allocations for social sectors. The revenue and fiscal deficit targets in 2007-08 Budget (1.5 and 3.3 per cent of GDP) would be met, according to the Finance Minister. While mobilization of additional resources has become imperative, the Finance Ministry exudes confidence of meeting higher plan expenditure in 2008-09, second year of the 11th plan, on the basis of the buoyant trends in revenue receipts which recorded over 40 per cent growth in 2007-08. The Finance Minister is also expected to adhere to the fiscal consolidation process in the coming year.

Tax Policies

As one, who believes in moderation and stability of tax structure when there is satisfactory compliance, the Finance Minister is generally expected to maintain the rate structure of personal income tax. But suggestions have been made, including by the Economic Advisory Council (EAC), for adjustments in income slabs to afford some relief to those in lower and middle income groups. The Finance Minister is on record with indications of relief to sectors "stressed" by the rupee appreciation affecting their export competitiveness and a boost to labour-intensive manufacturing segments. In the main, the budget is expected to be largely farmer – and people —friendly, given the Government’s commitment for an agricultural revival and rural prosperity. In the run-up to the Budget, expectations have also been raised of cuts or adjustments in the customs and excise duty structure to make essential imports like crude oil cheaper as also other inputs for exports with a two-fold objective of moderating the price level and restoring the vibrancy of the manufacturing sector which has already been reaching out to the world. Here again, the EAC has suggested selective cuts to give a boost for consumer goods whose output had been declining over the latter half of 2007. In addition, Shri Chidambaram has also hinted at fiscal measures to offset the impact of adverse external developments on the Indian economy, as circumstances warrant. (PIB)