Seats of Power
After the presentation of the Union Budget, there is much talk of it being political and populist in nature. I think we have the ten dency of getting carried away by situations. To write off farmer loans is bad in theory, but is politically correct in an election year. Clearly, these were NPA (non-performing assets) amounts in the bank books and will have few financial repercussions. Agriculture assumes great importance as we head towards record harvests and record consumption, as increased incomes are resulting in changed food preferences. We need massive investments. We also need to repeal archaic land usage laws to bridge the gap between supply and demand. The village moneylender still dominates the marginal agriculturalists and the scheduled banks still service less than ten per cent of the marginal farmers. Sharad Pawar makes a political statement urging farmers to refuse payment to the village moneylenders who can be worse than the Mafia. I wonder if Pawar will provide security cover on a 24-hour basis to the many millions who suffer from this extortion in virtually every village in India. The Rs 60,000-crore write off will help ten per cent of the farmers, but can more than upset 90 per cent of the farmers who have no access to bank credit and pay close to 100 per cent interest to the village moneylender.
The media thinks that the Congress will follow up a “popular” budget with changes in government and party, and that a “new” power centre for the future may well take shape. All these matters pertain to internal politics within the Congress. There will be constant speculation on the timing of the election and I can see a limited benefit for the UPA if elections are held about six months before schedule, around OctoberNovember 2008.
The past four years have seen the UPA concentrating on economic issues, and without doubt, the economic team has had a reasonable amount of success. The NDA had also done well, but this helped very little in getting success at the ballot. I don’t think the situation is any different now and to plan elections on the state of the economy and a “soft” budget can be a mistake. It is the political reality that determines the timing of the election, and in the absence of a national trend and a charismatic leader who can cut across regional patterns, it becomes necessary to do a number-count in the states based on current and future alliances and anti-incumbency trends. Economic growth will not be a major factor, but on the nega tive side, inflation and price rise can have a devastating effect on the have-not voters who I think are still in a majority. The stock market crashed this week, and there is little confidence in the changes that are being made by the finance minister as apparent from the Budget. We can blame global trends for this, but the intensity of the drop in the Sensex clearly reflects uncertainty. So predictions made by the government at this stage will offer little solace as a financial chaos unfolds in the West.
The Gujarat elections gave a very clear message and this may well be the pattern for the future. Chief minister Narendra Modi was much maligned, but he had the integrity and the performance to beat the anti-incumbency factor and to contain the Congress which did everything possible on all fronts. But can anyone in the current situation see a similar situation in any state?
Nitish Kumar in Bihar will get the credit for integrity and the law and order situation and may well maintain the Assembly trend in the Lok Sabha election. But even Navin Patnaik, despite good integrity levels, will suffer on the issue of performance and will lose some seats. Initial assessments show strong anti-incumbency trends for the Left in West Bengal and Kerala, and for the BJP in Madhya Pradesh, Rajasthan, Chhattisgarh and Punjab. The Congress in Delhi, Haryana, Assam, Andhra Pradesh, Tamil Nadu, Jharkhand and Maharashtra is in a similar predicament. As for Uttar Pradesh where the BSP and the SP fight for supremacy, there is little in terms of governance. Both the Congress and the BJP can make limited gains if political “accidents” continue to take place at regular intervals.
Political astrology is fraught with risks, but I see the Congress combine ahead of the Third Front formation, with the BJP combine coming in third. But it is a very close race. Current allies, with a few exceptions, may well switch sides and go from one front to another as the theory of numbers prevails over ideology. The 2004 election was lost by the NDA by a sharp and decisive vote swing in Tamil Nadu, where the AIADMK was literally decimated and the TD was defeated by the Congress. A total of 50 seats went from the NDA to the UPA. This time the AIADMK is set to sweep Tamil Nadu and can go into any formation, or like BSP can stay independent till convenient. Chandrababu Naidu and the TD may have to do little to defeat the Congress, and we may find 40-50 seats changing hands all over again. If this takes place, then change is inevitable in terms of front formation at the Centre.
T he bad news from the financial front is compensated by the cricket victory. I think we should give a special award to Harbhajan Singh who has shown determination and nerve in tackling the bigbully attitude adopted by some Australian players and the media. The financial muscle of the BCCI ensures that no partisan action will be taken. This should be contrasted with what took place in the second Test match against Australia where we were cheated out of a certain victory. The IPL auction placed Harbhajan Singh and Ishant Sharma at twice the sum offered to Ricky Ponting, Matthew Hayden and Adam Gilchrist. M.S. Dhoni, Sachin Tendulkar and Yuvraj Singh got four times. This could be a possible reason for the “heartburn.” I suppose it is difficult for many to digest that India today offers the biggest financial package to cricketers from all over the world. Cricket is no longer a colonial club.
The author, Arun Nehru is a former Union minister
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