THE TUSSLE

The Tussle

“People will do anything to alleviate their anxiety”, says  medical doctor Arnold Rosen to Don Draper, the celebrated Ad Man in Mad Men, Season 6 Episode 1.   

Even turn a blind eye to corruption, appeasement, terrorism, economic chaos, being snubbed, bullied, and laughed at by other countries. They will put up with rapine, plunder, lies, high-handedness, all to sue for a supposed stability and peace. Even in an era when economics has subordinated politics everywhere and we are doing very badly indeed.

Yet the entire Indian public has been enabling a discredited Government that refuses to go. One that dares to presume on a third consecutive term! It hopes for this by constantly harping of people’s fears and risk aversion. And also because it holds the intelligence of the public in contempt.

How can an illegitimate Government, run by remote control, using the unelected and extra-constitutional NAC, presume to lecture everyone? But it patently does.

But change, as we all know, is inevitable. And the Congress Party, much to its terror, can sniff it in the air.

So it is fascinating to watch Mr. Narendra Modi position himself on the national stage as a man with solutions for all our ills. Particularly, as the bad economic news continues unabated and relentless.

The lines are clearly drawn. The conch shells of electoral battle can be heard. The contender, more than his party, gives us hope, while the Government and all its stratagems, gives us anxiety.

All the euphoria of the India Story is slipping away. The Stock market indices are at a seven month low. SEBI is busy bullying Sahara while all others and their concerns wait.

Listed companies are going to post the worst quarterly results in three years.  A stellar company like Wipro lost 11% of its value in one day. The automobile sector, one of our greatest FDI attractors, is sitting on shrinking demand for the first time in 12 years.

The mid-cap stocks are so beaten down, that the companies, hundreds of them, have lost 90% of their market value. The promoters’ stakes too are pledged to lending institutions and banks. They would all go bankrupt any day of the week if their loans were called in.

The Banks too have unprecedented piles of Non- Performing Assets (NPAs), and if the bad debts were to be wiped off their books, several of them, both private and public sector, would also go belly up. 

But the welfare expenditure keeps climbing, even as Government coffers empty out because of lower direct and indirect tax yields-- combined with massive Government debt and debt servicing.

Loaning money to business and industry is largely a thing of the past, thanks to the RBI’s unreasonable and short-sighted stranglehold on liquidity. There were more than a dozen brutal interest rate hikes over the last two years. Credit growth, as a consequence, has now plunged to a 15 year low.

The Planning Commission, a useless relic from the era of Soviet style central planning, only makes some out-of-touch-with-reality pronouncements. One such is its infamous a-family-can-live-on-Rs. 32- a-day remark.

The Government meanwhile refuses to acknowledge any culpability for the dire straits the economy finds itself in. It is busy trying to mislead everyone with anodyne forward- looking statements.  

The Congress Party, that controls all the key ministries in the UPA, knows most people do not understand financial matters, and are taking advantage of this fact.

Of course, the huge price rise, the inflation, the scams galore, the high fuel and LPG prices, the lousy law and order situation and rampant terrorism, the public does comprehend.

But the Government seems to have decided that middle- class wrath is worth taking, thereby risking their arm with 40% of the population in urban areas. But will the 60% in the rural areas, more than half of them very poor, vote for them as a result of the massive welfare spending on doles?

This might have worked in the India of the seventies, but since then, the poor too have become aspirational. They will not content themselves with scraps from the high table anymore. They want development and infrastructure and the dignity of making a living for themselves.  

The bribe of a sari, a bottle and a measure of cloth is not enough.  Neither is a well- publicised but paltry dole that never seems to reach the intended recipients.

The Government meanwhile is running scared of Narendra Modi. They are trying all that they can to discredit him. They would rather have anyone else from the BJP or the regional parties to work against.  Hordes of functionaries, “stooges”, and hysterical acolytes have been tasked by the Congress Party to propagandise against Mr. Modi. The 128 year old Congress Party doesn’t seem to mind rolling about in this muck of misinformation with porcine aplomb.

Of course, Mr. Modi is well aware of this.He is working hard and his detractors are being countered with a groundswell of popular support. He, like game-changer Barack Obama, is setting the agenda for the next general elections. He is forcing the debate to rise above its usual promises and lies.

This will be an election in which the issues are framed in terms of both Government and Governance as applied to Development. The Congress Party, new to this show and tell technique, is busy playing catch-up.

(889 words)

April 11, 2013

Gautam Mukherjee