When polls drive the consensus engine

The Congress Party has now shown more decisiveness and sense of purpose than it has over the last three or four years. Accused of policy drift and dilly-dallying on major and crucial economic reforms, it has shown that when it really wants to get things done, it allows nothing to come in the way.

A government that found it difficult for years to convince its allies, much less the Opposition, about issues like foreign direct investment in retail and on pension and insurance reforms has pulled off not one but two social welfare schemes — the National Food Security Bill and the Land Acquisition, Rehabilitation and Resettlement Bill —within a week.
Even as economists, pundits, corporate magnates and many others declared that both the laws would not only cost the exchequer heavily but also slow down further investment in the country, the United Progressive Alliance-2, pushed along by its chairperson Sonia Gandhi, went ahead and got the two bills passed in the Lok Sabha. The Opposition, especially the Bharatiya Janata Party, raised all kinds of objections but found itself in a piquant position — could it really be seen objecting to provisions that help the poorest of the poor and the land-owning farmer, especially with elections round the corner? All politicians, whatever their misgivings are otherwise, had to tone down their criticism and let the bills go through in the Lok Sabha. The best they could do was to call them “Vote Security Bills”. Which of course they are. All political parties want to appeal to as wide a section of the electorate as possible. The Congress does not have a captive, nationwide constituency based on religion, caste or community — that is its weakness but also its strength. It has always been a welfarist, left-of-centre party with a socialist heart, even if many of its policies also help forces of capital. After pushing through pro-market economic reforms over the years, Congress president Mrs Gandhi ensured that the party did not forget its obligations to the weak and the poor and brought out two bills that were pending for some time. Her party and government had no option but to follow.
What we are seeing is an intriguing and ironical reversal in our polity. For years now, ever since Manmohan Singh’s first budget in 1991, it has been argued that there is a political consensus on economic reforms. Barring the left parties, all others were in agreement about the direction the economy should take and for more opening up for investment. When the first wave of liberalisation was launched by the Narasimha Rao government — necessitated by the crisis situation in the economy — all manner of serious objections were raised. Politicians from all parties, including the Congress, ominously declared that Indian companies would be taken over by foreign companies and growth would suffer. The Bombay Club was formed by prominent industrialists to lobby against the opening up of the economy to foreigners. The government remained unmoved and went ahead.
By and by, other political parties too bought into the reforms and when in government, the objectors continued with liberalisation policies. H.D. Deve Gowda and the National Democratic Alliance headed by Atal Behari Vajpayee proved to be even bigger reformers than Rao and even the business community came round. The Indian economy grew rapidly and India was deemed to be “shining”.
Under UPA-1, the economy went into overdrive and the India Story was now the phrase that everyone — or everyone who had a voice, such as businessmen, investors, commentators — bandied around. India would grow at the same scorching pace for the next 20 years — did it not have the demographic dividend, the skills and the entrepreneurial spirit? Was it not the darling of the world? Were not people with a lot of investible funds rushing here? Were not its tycoons buying up companies abroad? This was going to be India’s century.
But of course that euphoria was misplaced. “Fate was aiming a nasty jolt to the solar plexus,” as P.G. Wodehouse would have said. The global economy tanked, foreign investors decamped and Indian companies which had over-leveraged their balancesheet found themselves with additional capacities with no buyers. A series of scams in India, which had occurred during UPA-1 but went unnoticed because of the cheery economic mood, surfaced. And the Opposition parties, impatient because they had been denied power not once but twice, became restive. They objected to every initiative and proposal of the government. This was understandable up to a point, but soon enough it also became apparent that not only were they raising issues like corruption (and the perpetual demand for the Prime Minister’s resignation) but going against their own stated economic agenda. The BJP, which had declared itself in favour of FDI in retail, for example, now claimed it would not allow it to happen at all. This total reversal was partly tactical, partly cussed and mostly obstructionist to not allow the government to function. Many regional parties which would have gone along with such a policy at another time dug their heels. The end result was a gradual dilution of the consensus among political parties. Today, it is impossible to envisage a single government decision the Opposition parties would agree to.
And yet, we have seen the amazing spectacle of all major parties allowing the food and land bills through. They may still face objections in the Rajya Sabha. But the relative ease with which they went through in the Lower House is remarkable. In the current scenario, politicians are less likely to support what the corporate sector wants even if they constantly attack the government for mismanagement of the economy. There is political consensus, but the focus has now shifted.

The writer can be contacted at sidharth01@gmail.com