Poor
Sunday- Worst Political Economy.
It is unfortunate that on
this Sunday (19/04/15), India’s economic debate has again centred on Poor. It is
the force of democracy that Modi, who came to power on development agenda is
forced to repeat word POOR every alternate sentence in a speech given to BJP
parliamentarian (in a work shop which itself was titled something like “Schemes
for Poor”).
It means all theories
about victory of BJP with regard to aspirational poor and a vote against
entitlement politics (free- bees) of UPA was wrong. Similarly theory of AAP
winning election based on alternative politics was also wrong. The fact is in
Lok Sabha election people voted single party against coalition and preferred
Modi against none (Now Rahul is trying successfully to make it Modi v/s Rahul).
Victory of AAP can also be seen where peoples were attracted by Kejriwal and his
promise of free water, subsidised electricity and regularisation of illegal
colonies (reaffirmation of entitlement politics).
I am not against poor, I
am against policies which makes no economic sense or unviable but are announced
and people vote for it. It is also unfortunate that those who is not pro- poor (freebees)
is pro crony –capitalism. The fight is
between two vested groups to corner natural resources at the cost of national
development.
It is not a political but
social problem. A divided society where no group has empathy for other group. For
example, as long as UPA policies were benefitting rich and upper middleclass,
everything was good. The moment it became pro poor by way of MNERAGA, RTE
(Right to education), Rights of Tribe, Food Security Bill etc. all started
crying about policy paralysis and scam etc. The crime was not a policy
paralysis, the crime was spending more than the earning.
NDA came to power and
everything changed, there was sensible, central and railway budget. There are sever
cuts on education, health and welfare schemes due to fund crunch and so on. (But
I am not endorsing cuts).Now if it shifts gear to pro poor, label of policy
paralyse by rich is not far away, and many of good program like efforts to take
railway on track or properly responding to China policy ( encircling India) will be derailed.
Coming back to problem of
policy of entitlement and crony capitalisms- why we cannot have middle path.
Presently, when everyone says crops are failed and farmers are committing
suicide (must be true), but then why there is no corresponding dip in crop
output. Or why we do not admit damage is to the extent of crop damage and say
only really affected farmers be supported. Further, no body ask, why farmers
are not saving for a bad crop in a cycle of 3-4 years. For industrialist also,
financing pattern in India is such that, in case of profit shareholder/owner
corner benefit but in case of loss lender (bank) suffers. Owner boast of being
entrepreneur but does not take risk of loss.
Reverting to land bill
which is in the storm of controversy, every rational parson (not only
economist) agrees that there is need for reduction of population dependent on
agriculture. (Presently for 13 % of GDP contributed by Agriculture, but almost
67 % population depend on it) and land is urgently required for non-agriculture
purposes. Then why schemes are not
prepared, where by owner farmer continues to own land and/or enjoy benefit out
of it when land is proposed to be utilised for non-agriculture purpose.
Thus focus of debate on
the bill should shift from, consent clause etc. to retaining ownership /perpetual
benefit like an owner. Farmer should accept the need of land for
non-agriculture purpose and entrepreneur / industrialist should be ready to
give proper rate of return on a factor of production –Land.
In general every Debate
or Policy should not be pro-poor or pro rich, they should be pro-anti-development.
Somewhere, policies advocated by Amirtya Sen and Jagdish Bhagwati/ Panagariya
should merge together. For
this to evolve first society should develop empathy.
Else, the way we have
lived with Garibi Hatao as slogan and Crony Capitalism as policy for last 45
years, we shall continue to live for another hundred year. The dream of taking
over China will be a dream for ever.
We need to change content
and discourse of Political Economy.
