Economics, in purview of a society and nation, dealing with statistics, statistical analysis, facts and figures (that raise numerous questions), planning around those figures; seems to be inescapable field without which a nation might lose the line of action. Politics on the other hand dealing with public policies, social issues, administration matters and whole gamut of affairs, affecting nation from inside and outside; seems to be a bond that we can’t cut off with. In fact in the hindsight what many of us believe to be true is Politics is the key attribute kept in mind while playing with Economics. The relationship between both of them is that of a horse and a rider, which without each other lack direction, vision and pace. In short both are inextricable connected to each other. But the question at place is “Is Economics the key to Politics?” Can Politics really do without good economics?
What politics and politicians do to the nation cannot dilute the fact that politicians are the selected few in society (selected by us) who have the reins of our society and nation. Coming to the power once might be easy but retaining that power is a tougher act and an object of accomplishment. The fact is ‘satta mein rehne ke liye’ (to keep oneself in power), one has to play around with figures and stats. And we can’t out rightly state that it is illegitimate or unethical, provided it is not camouflaged or highly distorted. In fact I am in support of this juggling with the figures rather than to woo vote by handing over hard cash/liquor and other things of utility/luxury to the people. The game of figures that happens at the budgetary sessions is more of a relief because the digits spoken of are accountable and will be judged in the next annual sessions. There is a defined roadmap and the money has been distributed for various projects and development tasks. We know how much our country is in debt and how much credit worthiness we have. Yes, I am talking about the importance that the Budget has on the political scenario of a nation. And especially if it is the last full fledged budget being presented by the ruling party before the ballot.
There is no denying of the fact that it was a tightrope walk for our Finance Minister Palaniappan Chidamabaram to present a budget when our nation is marred by high inflation, slow growth rate and industrial stalemate and at the same time elections ahead. PC very smartly walked the aisle keeping everyone happy, not only on the national stage but also on the international stage (Credit Rating companies). The process of reforms that have initiated much before have been applauded from every nook and cranny though we still have some loopholes here and there. Not indulging into the minute details, I would like to highlight that by introducing 10% surcharge on Super rich quoting it as ‘Taxing the Super rich’ was a smart move as it is 10% on the tax that the super rich currently give. It was a breath of relief for that “elite” class which to many of ours amazement comprises of just 42800 people in the country of 1.2bn population! Not touching the tax slabs at all turned out to be breather for the major section of society – the middle class. So middle class also has no reason to make noise. Though that is a separate story that buying SUV, eating outside in AC restaurants and entertainment is going to be expensive! And after all hike, you can’t even smoke a fag as it will be costlier too. But all this is generally seen as the by-product of the budget. So till here Super rich and the middle class ‘seem’ to be satisfied.
Then comes that section of the society which comprises of 54% (approx) of the workforce and we are quite dependent on them, the farmers and the villagers who are the building blocks of our society. This is that section of society which toils hard on the farmland to make sure no Indian sleeps hungry. For them Direct Cash Transfer has already been rolled out with the target of being implemented in 51 districts starting January, 2013. Despite of its shortcomings, loopholes and infrastructure inadequacy to implement the scheme, it has once again lit the lamp of hope among those who look forward to such promises. DCT (Direct Cash Transfer) Scheme as a part of UIDAI if implemented rightfully will be the world’s largest successful such a scheme. We all hope that it turns out to be a success and we do not get another scam out of it! Then there are so many yojanas that are being run for the welfare of the masses such as Antyodya Anna Yoajana, Annapoorna Scheme, Swarna Jayanti Gram Swarojgaar Yoajana, Sarva Shiksha Abhyaan, Mid Day Meal Scheme and the most successful among all THE MNREGA. (all these yojanas irrespective of the incumbent are operated with full zeal because they are the key to the major chunk of society)And the fact is lot of ECONOMICS goes into devising such schemes and validated against bang for the buck. And the think tanks behind all this are people like Kaushik Basu (former Chief Economic Advisore to GoI), C Rangarajan (Chairman of PM Economic Advisory Council), Raghuram Rajan (current CEA to GoI), etc who are hard core economists. So we are near to show that how important is economics to the politics.
It is not important that which all issues you touch upon but also which ones not to mention. We all know that GST (Goods and Services Tax), GAAR (General Anti Avoidance Rule) and DTC (Direct Tax Code) didn’t find mention anywhere as they are all contentious issues. CAD (Current Account Deficit) which is pegged at less than 5.2% for this fiscal and 4.8% for the next was the figure everyone was looking forward too. The businessmen and industrialists were looking forward towards the relaxation that they get if they invest in industrial sector. The world outside is still hoping for Indian system to get better so that they can invest freely in India and do not end up in Vodafone or SSTL (Sistema) scenario. And government is doing each of its bit to invite foreign investment because it is a crystal clear fact that if it doesn’t happen CAD is going to be worsen and so does the Budget Deficit. The cost of which will be have to bore by the end consumer directly or indirectly. So I guess you would have the taste of it by now that how important is the economics to politics because “if ‘janta’ is not ‘khush’, fir vote ke liye kaise karoge push?”
And it doesn’t ends here. With Mr. PM being an DPhil from Oxford and Economic Tripos read at Cambridge, Deputy Chairman of Planning Commission (Montek Singh Ahluwalia) being another Oxford Graduate, other politicians such as Jyotiraditya Scindia (MBA, Stanford), Sachin Pilot (MBA Wharton), it does make sense to say understanding of economics is a must do to be a politician “literally”. And the fact gets strengthened by The Economic Times act of changing it into The Economic & Political Times. Probably Economics is the precursor of Politics. So with this we can hope the economic scenario of our nation improving considerably keeping in view the political events lying ahead in near future. After all ECONOMICS is the key to POLITICS!
(The writer is a Software Engineer in Chennai)