BOOK REVIEW-Can Good Economics Become Good Politics?

BOOK REVIEW

Title:                     Politics Trumps Economics-the interface of economics and politics in contemporary India.

Editors:                Bimal Jalan & Pulapre Balakrishnan.

Publisher:           Rainlight, Rupa Publications Pvt. Ltd., 2014.

Price:                    Rs.500/-

Can Good Economics Become Good Politics?

The central thesis of this book of essays by a number of eminent economic thinkers is that politics in India generally trumps economics, much to the latter’s detriment. Essay after illuminating essay of the dozen in the book make commendable suggestions, with the underlying assumption that they are doing their bit far removed from political compulsions. It is a kind of academic high horse but a fountain of cogent, well-researched ideas nevertheless.

For long years, most Indian regimes believed that economics must, as a matter of ‘progressive’ ideology, be subordinated to the politics of raising up the illiterate and hungry poor, who cannot understand economics anyway. This is a standard Socialist position, but one that has delivered less than salubrious results by stoutly ignoring market economic principles of demand and supply over ideology.

Today, it could be argued that good economics can also be good politics. Incumbent State Governments being voted in for multiple terms may well be a case in point. But much needs to change. Many of the essays in this book seem to take for granted that the public sector units and the infrastructure provided by the Government cannot ever be efficient, or even sufficient. A surrender and abdication of governance is treated as a given. But again, some well-run State Governments have disproved this upsetting and cynical assumption.

Accountability however, remains a major lacuna. The blurb on the back of this book says ‘It is mainly that, over time, India’s administrative system has become largely non-functional and unresponsive to the interests of the average citizen’. And yet, clearly, suggesting privatisation cannot be a general panacea.

P Chidambaram, then Finance Minister, gave a speech in Singapore in 2008, quoted here by Pulapre Balakrishnan: ‘ India must touch a 10 per cent growth and sustain it for 10, 20 and 30 years to make poverty part of Indian history.’ It is another matter altogether that the UPA never did touch 10% growth in GDP, and went into a steep decline in UPA 2 instead. Still, the fact remains, as makers of policy, the Government controls the game, and only has itself to blame for non-performance.

Mr. Jalan, a former RBI Governor, writes: ‘The main objective of the essays in this book is to highlight the importance of adapting economic policies to the evolving situation in terms of what the economy needs at any point in time rather than adopting differential policies dictated by different ministries, depending on the wishes and special interests of individual ministers representing multiple small parties in a coalition government’. Mr. Jalan’s plea for coherence, and the common weal, is perhaps echoed by  Prime Minister Narendra Modi’s effort to group several related ministries to prevent turf wars, wastage, duplication, and working at cross purposes.

But yes, to a large extent, this book, published as recently as  February 2014, has been overtaken by events. We now have the first majority government at the centre in 30 years. Another essay, by Poonam Gupta, a World Bank Economist, lists BSP, RJD, CPI and CPM as National Parties. They are all now decimated, and unlikely to revive. The oldest of the bunch, Congress, is also on a sticky wicket.

The Editors emphasise productivity. They write, ‘We have reason to believe…higher growth rates have been secured from levels of domestic investment lower than what it is currently’. The Modi Government is well aware of this, and has mooted an Expenditure Monitoring Commission for the first time. It is even tweaking the massive welfare programmes inherited from the UPA for greater efficacy.

Former JNU Professor Dipankar Gupta, makes the point that the ‘cleavage’, between rural and urban India is blurring. ‘There has been a tremendous increase in Rural Non-Farm Employment (RNFE)’, he writes, ‘what was once a secondary occupation for most villagers is often a primary one today’.

The RNFE sector contributes 45.5% of rural net domestic product today. Gupta also states, ‘There has been a steady rise in the migration of male workers from rural to urban India. In less than 10 years,  … the number went up from 36.5 to 41.6 per cent. In just one year, between 1999 and 2000, the proportion of people migrating for jobs jumped by as much as 15 %’.  He concludes presciently: ‘the unities between citizens will be much greater than what has been in the past’. Lord Meghnad Desai calls for ‘Social equity’, elaborating on this same theme.

Is it little wonder then why Narendra Modi swept the polls in a young, aspirational India, hungry for development and jobs?  The nature of the political beast may indeed have changed for all time to come. It is a perform or perish form of economy led politics now, and this volume of ‘think pieces’ written for an if-only world, could well serve as a source of inspiration and good ideas.

(806 words)

July 13^th, 2014

Gautam Mukherjee