“…We cannot allow our growing educated and middle classes to be disillusioned and alienated from the political process.” That was Sonia Gandhi, reading the riot act to her government. Place: Jaipur. Date: January 18. Year: 2013. It did seem, even if fleetingly so, that the Congress had experienced its Eureka moment.
It clearly wasn’t enough to have a Eureka moment because nothing followed from the pulpit of the UPA government in terms of action. Since then, inflation rose higher, growth fell lower and job creation worsened. The transaction costs of life and living are at an inflationary high and the returns are deflating by the day. Every issue the middle class agitated about is yet on the marquee of outrage.
Now, a year later, the concern has returned—prompted clearly by the electoral drubbing and the rise of AAP. The admission that the UPA had not been sensitive enough to the aspirations of the middle class could go down as the understatement of the decade. Tragi-comically, it had an immediate consequence: the middle class got an item song as scripted politics unravelled. The cap on subsidised LPG cylinders is being raised from nine to 12 per year.
Erroneous conclusions drawn from specious assumptions have come to be the hallmark of governance under Congress. It would seem middle class aspirations can be quantified in sum of pieces —and are only about doles and subsidies. This, from a Prime Minister the middle class had hoisted as one of its own. This, from a party voted back to power by nearly half the urban and semi-urban constituencies—barring Gujarat and Karnataka, by metros of Delhi and Mumbai. The middle class in many ways, it would seem, is being hoisted by its own petard.
The wrath of the middle class is located in failed expectations. The three principal issues that top any opinion poll are inflation, corruption and employment. The Prime Minister has referred to the issue of inflation in 88 of his speeches but little was done to quell prices by improving per acre yield or unloading buffer stocks to cool prices. The APMC issue has been a four-letter word for long and highlighted as the villain for over a decade. Does it take an electoral drubbing and 10 years for the chief ministers of the Congress to stir into ideation—leave alone action? Corruption figures in 106 of the PM’s speeches. And yet the principal instruments to tackle it are left pending in Parliament. It is no secret that corruption is vested in discretion that funds parties through a political tax. Ten years after UPA, India languishes at the bottom in ease of doing business rankings, thanks to the permission raj.
The UPA regime is proud of its record in growth. It also states that growth is not the only thing that matters. True. It should translate into jobs and prosperity. Inclusive growth demands that people be moved from the trough of low income to higher incomes and the economy from low productivity to higher productivity. What does the evidence state? In 2012-13, industry mining and manufacturing grew slowest in two decades—at 3.12 per cent, 0.43 per cent and 1.89 per cent. India did better in 1992-93 in the immediate aftermath of the 1991 crisis than it has in 2012-13.
Under the watch of Dr Manmohan Singh, despite several committees and GoMs, the share of manufacturing as a percentage of GDP has moved from 15.19 per cent in 2003-04 to 15.24 per cent in 2012-13. Thanks to the civil war in the government over what constitutes development. The queue of stalled projects has lengthened and the value of stranded investments has shot up from Rs 75,000 crore in 2005-06 to over Rs 12 lakh crore in 2013-14. The consequence of multiple failures resulted in fewer jobs and lower growth (http://bit.ly/Lnn8oL).
This government came to power riding the plank of inclusive growth. Fundamentally, there is no conflict between the desirability to create entitlements for the poorest and the necessity for growth. The two are not mutually exclusive. The UPA, however, engineered a conflict between economics and politics. Despite all the literature churned out by the many commissions and committees, it couldn’t get its act together on the basic plank that it was voted on. It is as if its politics is knowledge-proof.
The aspiration of the middle class is about pride, empowerment and free will. It is about equity and efficiency in governance. There can be no efficiency without equity and there can be no equity without efficiency. For too long, the Congress has taken refuge under a banal banner—that the middle class doesn’t matter in the electoral arithmetic. Fact is, every defeat of the Congress has been catalysed by the middle class—1977, 1989, 1996 and 1998.
India had the opportunity to ride on global growth and redress the long-pending issues of the political economy. The UPA was well placed to take the hard political decisions and create a lasting legacy. Instead, it chose the easy option of votebank economics and created lasting liabilities.
There is a salutary lesson here—and not just for the Congress.
Shankkar Aiyar is the author of Accidental India: A History of the Nation’s Passage through Crisis and Change