NDA slipping

Dr Bharat Jhunjhunwala
People have waited these last one and half years hoping that they will get some relief from the new NDA Government. But 2015 has gone by and no relief is visible on the horizon. NDA II seems to be inexorably moving towards repeat of its 2004 defeat. Prime Minister Vajpayee had done a good job in winning the Kargil war, making India a nuclear power, starting the Golden Quadrangle project, and laying foundations of our success in the Information Technology sector. Yet the NDA lost the elections handsomely because there was nothing in this model of development for the common man. The NDA was taken by an utter surprise in its hour of defeat. I and many other writers had repeatedly drawn attention of the NDA leaders that there was a need to look at the impact of the policies on the poor. These voices of dissent fell on deaf ears.
Subsequently, the UPA won the 2009 elections mainly on the strength of MNREGA and farmers loan waiver schemes that reached relief to the common man. At that same time the UPA had further opened up the economy for foreign investors. The UPA won on the plank of pro-poor economics despite the fact that it was under repeated accusations of corruption. This again establishes that pro-poor economic policies can overshadow other weaknesses.
2014 saw Narendra Modi pitching for development. The people were fed up with corruption under the UPA regime. There was no issue of pro-poor or pro-rich in that election. The Congress could not raise this issue because it was in the helm of affairs till then. It could not possibly allege that its own Government was anti-poor. The BJP pushed the “achhe din” agenda. Implied here was that life of the common man will also see improvement. Once again it is established that pro-poor economic policy is the key factor in elections. Alas! Leave aside the hype, there is little in the policies of the present NDA Government that will provide relief to the common man. 2019 is likely to see defeat of NDA because there is nothing for the common man howsoever beneficial they may be for the country. Results of the Delhi and Bihar elections are a preview of this upcoming defeat.
The loss of NDA in Delhi is attributed to the anti-corruption agenda of AAP. The loss in Bihar is attributed to the caste and community factors that brought together the Yadav and Muslim votes under Nitish and Laloo. It is important to note that the same polarization was not seen in the 2104 national elections. This means there was some other factor at play that swung the votes against NDA after the 2014 Lok Sabha elections. This was the anti-people policies followed by NDA. The Bullet Train is good, but it hardly provides relief to the common man who travels in the Second unreserved rail compartment packed like sheep—or even worse.
The Delhi elections were won by AAP because the sheen of the NDA had become cloudy in the few months of its rule. The Bihar lections were lost by NDA mainly on Nitish Kumar’s performance on the development-for-the-common-man agenda. The NDA failed to deliver on the promises made in 2014 Lok Sabha elections. Markets are placid. Prices are rising. “Achhe din” are not visible even on the horizon. There is a saying that character of the person is seen when he lies in the infant’s cot. NDA’s anti-people pro-big business character has become clear to people in the last eighteen months of its rule. This is the real reason for the defeat of the NDA in Delhi and Bihar. The NDA has only packed its anti-people policies in a pro-people packing paper.
The Jan Dhan Yojana seeks to transfer the savings of the poor to big businesses. The Pradhan of a village in Uttarakhand told me that large numbers of people had got their accounts opened under the scheme with the belief that they will get easy loans of Rs 5,000 in each account. But not one account holder has been given a loan yet. The Banks are expected to follow their usual lending norms in giving these loans. It is risky to give unsecured loans. The Manager can be hauled up in case of default. Thus Banks have merrily accepted the deposits but are unwilling to give the loans. The Government is not underwriting loans given to Jan Dhan account holders. In the result the operative part of Jan Dhan Yojana is to collect the savings of the poor people and supply that money to the rich borrowers.
The Goods and Service Tax is equally anti-poor. Presently items consumed by the poor are taxed at lower rates than the items consumed by the rich. GST seeks to impose same level of tax on both types of goods. The rate of tax on the car and the bicycle will become equal. The poor will pay more taxes after introduction of GST. Another anti-poor provision of GST is that the exemptions for small businesses will be removed. Presently small industries are exempted from excise duties. This helps them face competition from large businesses. The small businesses will lose this exemption.
The NDA has projected the soil health card as a major step to help the farmers. It is proposed that the Government will test the soil free of charge and provide guidance to the farmers about the fertilizers they should apply. But the farmers already have a wealth of knowledge about this form their experience. And, the reports of Government Laboratories do not inspire confidence. Such tidbits distract attention from the farmer’s main issue of prices of their produce. The hard reality is the NDA has much hype and little to show for real assistance to the common man. The success of AAP and Nitish-Laloo combine has built upon this failure of the NDA to implement any policy that will provide relief to the common man.
There is little likelihood of NDA repairing its policies. In fact, it is sinking deeper into the same anti-people policies that have led to the defeat. The NDA tried to restore confidence of the markets after the Bihar defeat by opening more sectors for foreign investment. This infatuation with foreign investors may be good for the IAS Officers and Ministers but certainly not for the people. Large automated factories set up by foreign investors eats into jobs. The importance of the development agenda is clearly visible. UPA won 2004 and 2009 on the development for the common man; and NDA lost 2014 in Delhi and 2015 in Bihar on failure of the common man’s agenda.
(The author was formerly Professor of Economics at IIM Bengaluru)
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