By Khushboo Kapoor
NaMo (our famous neta, Narendra Modi) calls our very own naturally taciturn PM as a ‘Rupaiya ‘ doctor for putting rupee on ventilator, while Congress party is on drumrolls after passing two new, economically unsound bills. The two main ingredients of this government’s shudh desi recipe for losing massive votes include the FOOD SECURITY BILL and LAND ACQUISITION BILL.
Congress hopes that these bills will prove to be vote winners in General Elections of 2014. In fact, these are delusions of grandeur. Ironically, the bills seem more likely to lose than win votes for congress.
Firstly, let me ask a question, can you think of any new bills that have delivered Utopias? What, still thinking? Despite the Right to Education act, that was passed in 2009, after shifting of tectonic plates in Indian politics, talking about decent education for all even today seems to be a silly joke. Ouch, that may hurt to the sentiments of our netas!. Politicians think that the people cannot understand the strategies employed to gain brownie points, but they forget one thing “Yeh public sab janti hai !”
Secondly, there is a tradeoff between Micro economic (personal) gain and Macroeconomic gain (welfare of country). Elections are fought on local issues and not on so called national issues that become sensational headlines, the best proof comes from 1996 elections, the country had just gone through five years of unprecedented economic reforms, when Congress lost badly, it was argued that voters had rejected economic liberalization.
So let me ask, can the new bills lose votes? Yes, indirectly. The Food Security Bill will cost around Rs.10,000 crore extra this year and Rs.25,000-35,000 crore next year. Though, this amount is quite affordable but recent financial crisis makes it more alarming: A crashing rupee threatens high inflation, investment funk and lots of pain. Our finance minister P. Chidambaram has pledged to shrink fiscal deficit to 4.8% of GDP. Now think, an extra of Rs.10,000 crore on food security means an equivalent amount less in productive plan investment.
Even worse is Land Acquisition Bill that mandates a social impact assessment for every project requiring land acquisition, delaying such projects by at least one to two years. Nowadays, there is a sudden rush in cabinet of showing its business in clearing projects worth lakhs of crores, but reality check! Many of them require land acquisition.
To foreign investors and rating agencies India appears to be an epitome of deep structural flaws in the political economy. In quest for votes, the government is driving the economy downward. The result may well be a downgrade in India’s credit rating to junk status. The rupee will fall further, inflation will rise faster, job and income growth will suffer more.
So, the recipe of congress thrives on keeping people poor and the best way to do that is to give away more freebies at the cost of pilfering the nation’s treasury. But, sorry Congress! This time sympathy votes won’t work as they had after the assassinations of Rajiv Gandhi and Indira Gandhi. So it would be better for government to discard its VOTE! VOTE! VOTE! Agenda, as whatever the long term benefits may be, new bills threatens to be a major vote loss in coming elections.