Politics, Frozen Logic and India's Winter of Discontent

Published: 20th December 2015 06:00 AM  |   Last Updated: 19th December 2015 11:27 PM   |  A+A-

Politics

It is said logic sometimes has very little to do with political action. In India, logic frequently has little to do with political action and inaction. In a week which saw the exposition of discounted logic, a few observations and comments on the brewing winter of discontent.

Like now that bail has been granted, it is time for those who manage the organisation’s model of politics to ask themselves whether muck-up and the melodrama was not entirely avoidable. Seriously, does it behove well for any party that swears allegiance to the rule of law to be seen above the law.

Like, it would be interesting to know the identity of the genius/geniuses in the Congress who engineered the triangular transaction—an endeavour that prima facie defies explanations. How did a party with a galaxy of lawyers escape and evade advice? If all is kosher, why is the issue an issue? The cause and clarifications—in the words of Lewis Carroll— are getting “curiouser and curiouser”.

Like it has been argued that the Congress delayed the GST bill for collateral reasons. It could also be argued the GST legislation was a victim of collateral damage. When this government was elected, I had said that India has migrated from “no government” to “no Opposition”. Why would a party with a historic mandate allow sloganeers to enable the invention of the Opposition? Perhaps the vacuum was, well, intolerable.

Like what happened in Arunachal Pradesh—a state vital to India’s geopolitical interests —is shocking. The kangaroo session held to oust a democratically elected government was the most brazen display of political arrogance. What is more shocking is that this happened when the BJP is in power at the Centre—surely, the BJP has not disavowed from its position against political imperialism that it accused the Congress of for decades! It makes one wonder if more should be read into the floating conspiracy theories within the BJP.

Like the Government of India in the half-yearly appraisal has trimmed down estimates for GDP growth to between 7 and 7.5 per cent in 2015-16—a full per cent lower than the Budget 2015 estimate. The consensus view—of most forecasters multilateral, multinational and domestic—was that the GDP would grow at best around 7.5 per cent. No surprises there.

Like what is surprising is that lower growth, which ordinarily means lower revenues, doesn’t seem to have impacted fiscal consolidation yet. But the shift in articulation from quantity to quality of deficit suggests trouble ahead. What is not surprising is the adverse impact of poor GDP growth on job creation, consumption, demand and investment.

Like, it is true that a combination of tepid global demand and weak domestic demand have hurt growth. There is little the government can do about external environment. It is mystifying, however, that the government has articulated but not adequately focused on the issue of domestic demand deflation—reflected eloquently in 13 months of persistent negative wholesale inflation, in the profit figures of companies, and in the level of investment.

Like the approach of the government—besides focus on structural issues—has been growth led by public investment. The jury is yet out—the red flag really is the data on unutilised capacity in the core sector. There is no doubt though about the near absence of private investments. Investment can scarcely take off in the face of poor demand and consumption.

Like the combination of hostile weather that hurt output, high rural consumer inflation, and lack of seasonal employment in sectors like construction has decimated rural demand. The UPA made the critical error of raising minimum support prices (MSP) even as global food prices shot up. The NDA is making the error of keeping MSP down even when global prices are low, thereby denying the definitive price support that MSP is designed for.

Like MSP is estimated to account for around 20 per cent of the Food Subsidy Bill. The thesis is that MSP hikes have a multiplier effect. Be that as it may, a critical question of the political economy begs answer. How can a political economy deny the worst off when government servants are to be paid over Rs 1 lakh crore? 

Like, it was hoped that the Modi Sarkar would be different. The fate of reports delivered by committees and commissions, however, is an enduring mystery. This government, when it came to power, appointed a parade of committees to inquire into and suggest measures across sectors (Pending Raj http://bit.ly/1JQRMS7). What is happening to the findings of the committees? What is the state or fate of the Expenditure Management Commission led by Bimal Jalan? What is the fate of the Debroy Committee Report on Indian Railways? Should not there be an outcome report on reports?

Like the unstated question at 4 pm on December 19, was: Okay! Does this mean the business of the nation can be proceeded with? The odds are stacked against hope given that the next date for appearance is February 20—close to Budget 2016 Session. There are also new doubts being aired about what exactly is the status of entities. There is the possibility that the Income Tax Department could step in to understand and enquire into the transactions on whether the Congress party was right/legally correct in lending money to Associated Journals Limited.

This could just turn out to be a long foggy winter. Logic may yet have little to do with political action.

shankkar.aiyar@gmail.com

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