An undersold story

T.N. NINAN

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WHATEVER the eventual outcome of the 2014 Lok Sabha elections, one thing is clear: much of the middle class, and perhaps the bulk of urban voters irrespective of class, has turned its back on the Manmohan Singh government. There are several, mutually reinforcing reasons for this, starting with the sustained double-digit inflation that people have had to cope with, a sense of drift and of no one being in charge, and a spate of scandals.

The prime minister may have beavered away at various policy initiatives in the style of a good bureaucrat, but he has shown a demonstrable lack of leadership. He does not speak, except at boring official gatherings and very occasionally in Parliament when he has been pushed to the wall. The dual control system has reduced the stature of his office and hemmed in his decision-making ability, and he has not helped his case by choosing the path of least resistance. Whatever people want from a prime minister, this is simply not it.

Then there is the economic miasma: the lowest growth rates in a decade, the highest inflation rates in a decade, a fiscal deficit that is proving difficult if not impossible to control, and record trade/current account deficits, with all these weaknesses reflected in a falling rupee. What is the use of having a reputed economist at the helm, people ask, when the economy is in a right royal mess. Sentiment has been further hit by anti-business decisions of all kinds, including the holding up of projects and the imposition of heavy, retrospective taxes. Singh’s other quality that he brought to the job was impeccable integrity, but again the question has been: what use is such honesty when he allows scandals of every kind to flourish, along with attempted cover-ups (as in missing files)? There is no getting away from the fact that, to whatever degree, he permitted both the telecom and coal mine scandals to happen.

Singh bristles at suggestions that he has been a weak prime minister, but even allies and ministerial colleagues like Sharad Pawar now accuse him of just that. Among other things, he has acquiesced in the face of Sonia Gandhi’s spendthrift and populist Indiranomics at a time of fiscal stress, while going along with too-clever-by-half lawyer-ministers who are glib but carry no conviction (as with the ‘zero loss’ theory on the telecom scandal).

It does not help the Congress that Rahul Gandhi has become the butt of jokes, perceived as an unwilling politician who is not ready for serious public office, a failure in his professed attempts to change his party, and a poor communicator who (from the perspective of middle class critics) is simply not addressing their major concerns while maintaining a studied silence on the issues of the day – other than a spectacularly ill-timed but apparently pre-planned outburst against an ordinance that he was probably party to approving in the first place.

 

Most of all, in an evolving society and economy where the balance of electoral power is shifting slowly but surely from the poor (who are still the largest chunk) to the aspiring classes especially in urban areas, the heavy emphasis on the ‘rights’ of the poor to handouts of various kinds, while failing to deliver an aspirational message related to jobs (to start with) and good governance, may well be putting the Gandhis on the wrong side of history. And so, even those who are not necessarily enamoured of Narendra Modi as a potential prime minister ask: What is the choice? Manmohan Singh? Rahul Gandhi? Thank you very much! And why not the Aam Aadmi Party?

Still, despite the drubbing that the Congress has received in four states in December, no one can be certain about what is coming. The Congress surprised middle class pundits in the general elections of both 2004 and 2009, by winning when no one expected it to. The December issue of Caravan carries a report on opinion polls, and is illustrated with the delicious picture of an India Today cover of February 2004, showing a smiling Vajpayee making the ‘V’ sign, above a headline for an opinion poll that said ‘Landslide for Atal’. Indeed. So who is to tell that the Congress won’t spring a third surprise? Some of the predictions today that the Congress will win fewer than 100 seats in the Lok Sabha remind one of L.K. Advani’s forecast in 2004 that the Congress tally would fail to get into three digits.

 

The Congress had calculated that the combination of the rural employment guarantee programme, the food security law, the much higher prices given to farmers for their produce, and a multifaceted focus on the poor by both Sonia and Rahul Gandhi, would deliver a rural vote that continues to be larger than the urban. Party loyalists might argue even now that this somewhat forlorn hope may still be valid – in both Madhya Pradesh and Chhattisgarh, after all, the party got a higher vote percentage in 2013 than in 2008 (it just so happens that the BJP did still better, as a polarized vote squeezed out smaller parties). They may also hope that the liberal critics of Narendra Modi, who seem to have fallen silent, will assert themselves in the polling booth. But the neutral perspective at the end of 2013 was that the BJP was on a roll and, whatever happens, five more years of Gandhi-Gandhi-Singh would be unbearable. Why blame them for thinking so? If any government has squandered its mandate (the Congress got more seats in 2009 than in any election since 1984), UPA-II has – in spectacular fashion.

The player that could conceivably put some sand in the BJP’s wheels emerged in the unlikely form of the neophyte Aam Aadmi Party, especially as it seemed ready to take the fight to some other cities. Whether that would work as spectacularly as it did in Delhi quickly replaced earlier pre-election debates, proving once again that surprises should never be ruled out in electoral politics.

Given the reality of a wasted mandate and the mood of the drawing room classes, it may be dangerous for one’s reputation to write in defence of the UPA government’s successes; not in defence of its entire record, which would be impossible, but of the good things that it has done and which in the present atmosphere no one seems to notice or care about. If you point to them, you could get taken for some kind of apologist for a very tired regime, or as the witless defender of a dynasty that stares at a troubled and uncertain future, as all dynasties must at some stage. It is also the case, unhappily, that even with the success stories, there are associated scandals, bungling and such. But recognizing all the qualifications and warts, success stories remains success stories. And if one lists them, it is in part because even the devil deserves his due, and in part to aid the writing of a fairer epitaph, should that become necessary. The good that the government has done should not be buried along with UPA’s bones. So consider the following.

 

Item No. 1: India is about to be free of power shortages. Yes, believe it or not, a country that has been bedevilled by shortages of electricity for at least half a century now faces the prospect of surplus power supply. In October 2013, the total power shortage was 3%, compared to the more usual 9-10%. This was despite the problems with coal and gas supply, which forced a lot of power generating capacity to stay shut or to function at well below capacity. If either the coal or gas supply issue gets resolved, and the plant load factor climbs a notch or two, there will be no shortage.

This transformation has not come about by accident. The new power capacity added during the 11th five year plan (2007-12) was more than twice what previous such plans achieved. The new trend has continued into 2012-13 and now 2013-14. Punjab alone hopes to add 5,000 mw of new capacity in the space of a year; that is what the whole country used to add in 12 months – and almost all of the new capacity will be in the private sector.

 

As in Punjab, so with the rest of India. The difference has been made by the private sector, which was first allowed to get into power generation in the 1990s, and in the initial bungling brought about the disaster of Enron and Dabhol. Many moons later, helped along by the UPA’s pushing of public private partnerships, the PPP model, private power has become the new reality. Indeed, it is about to account for so much new capacity that it will generate more power than either the central government sector (NTPC, NHPC, nuclear power, etc), or all the states put together. Meanwhile, power generators are already being forced to back down on the generation of costly power, because there is cheaper power available as an option. The boss of the National Thermal Power Corporation says it is unable to find buyers for gas-based power, even at a gas price of $4.20 per million British thermal units (a price that is soon to be doubled, if a partisan petroleum minister has his way, and which will automatically render all the gas-based power units in the country unviable – making for perhaps the last and final UPA scandal).

There have been controversies galore in this area – about the price of gas, the forced pooling of imported and domestic coal, the cancellation of captive coal mine licences, the terms on which some power projects have been bid, and so on. But having noted and taken account of all the messiness of decision-making, the end reality now is that India will soon cease to have power shortages. Who would have thought it possible even three years ago?

 

Item Nos. 2 and 3: The crying need in the country was for better physical infrastructure. Over the past decade, the country has doubled its investment in infrastructure, as a percentage of GDP. It used to be about three per cent of GDP that went into creating new infrastructure; that has become about six per cent. The target was 10 per cent. While we have not got there, the all-round improvement in at least two critical areas of the country’s physical infrastructure (not counting power) is there for all to see.

India’s airports were almost uniformly an embarrassment 10 years ago. Today, virtually every major city has a brand new airport, while the ones in Delhi and Mumbai rank consistently among the best mid-size airports in the world – sometimes ranking as high as No. 2. In domestic surveys, ones like Bengaluru occasionally manage to outrank the metro airports.

Then there is the oft-told story of the spread of telecommunications. Mobile tele-density in 2003-04 was in single digits; it is now over 80 per cent, making India second only to China in the total number of phone connections. These have ushered in a new level of connectivity, and enabled all-round productivity increases for everyone involved. Once again, the achievement has been marred by scandal and policy bungling, but the success in market penetration remains.

Item No. 4: The Unique Identity programme is about half implemented, but has the potential to be a game-changer when it comes to transfer payments (taking from the rich through taxes and giving to the poor through subsidies or cash transfers). Though the government announced a year ago that it would start using the identity numbers to do such cash transfers in select states/districts for a handful of chosen programmes, this has barely got going, so the scheme is still not fully proven. There are legal challenges, technical glitches and privacy issues to consider, but the big change is that cash transfers (as an alternative to distorted product pricing through subsidies) have caught on as an idea. As and when a full roll-out happens and the numbers start getting used for a variety of services, it will save many thousands of crores that now are lost in transit, misdirection and leakages as governments try to physically deliver subsidized commodities to more than 600,000 villages.

 

Item No. 5: The dramatic drop in poverty levels is a success, despite what the naysayers assert. Using the formula worked out by the economist Suresh Tendulkar, the National Sample Survey Organization has reported that the percentage of the population below the poverty line dropped from 37.2 per cent in 2004-05 to 22 per cent in 2010-11, an unprecedented rate of decline over a seven year period – brought about almost certainly by a period of rapid growth combined with a sharp increase in agricultural prices (and resultantly in agricultural wages). The Tendulkar formula is controversial, and has been criticized on various counts by leftist commentators as well as by members of civil society organizations; but whatever yardstick one uses, the rate of poverty decline is likely to have been greater in this period than any before it, and therefore has to necessarily be notched up as a success.

 

Item No. 6: The Right to Information law of 2005. Many laws have been passed by the current and previous Lok Sabha, which supporters of the UPA would tick off as landmark pieces of legislation (which even critics would say they are, even if they don’t agree with them). There is the rural unemployment guarantee programme, the law on rights of forest dwellers, the food security law, the right to education, the new law on land acquisition… in short the entire phalanx of ‘rights’ put into the statute books by Sonia Gandhi. But it is far from clear that these are all successes, though mainstream opinion has come to agree that they indeed are. After all, 45 million have registered for job cards under the rural employment guarantee programme, and nearly two million forest dwellers have been given land rights under the new law that governs them.

The new law on education, meanwhile, has many retrograde features that have been widely commented on – including a continuing emphasis on educational inputs rather than outcomes. The food security law probably misunderstands the hunger problem and in any case overreaches by seeking to cover two-thirds of the population. The unemployment guarantee law has been poorly implemented and is no substitute for a proper focus on promoting employment-creating activities like labour intensive manufacturing. And the new land acquisition law (while a vast improvement on its colonial era predecessor because it offers a better deal to those whose land is forcibly taken away) has also put in place a cumbersome procedure that could end up creating a new class of middlemen.

While opinion will differ on the good and bad qualities of the UPA’s clutch of ‘rights’ laws, the one law that suffers from no such disabilities is the one on right to information. It has whittled away at the archaic secrecy of government functioning, and made access to government decisions and processes possible for any citizen. Flowing from a civil society agitation that began in Rajasthan and provided inspiration for a broader movement on the issue, it has empowered citizens as few laws have. Its success finds testimony in the attacks on activists who seek information under the law (which means it is threatening vested interests), and by the (so far unsuccessful) lobbying within the government to restrict the scope of the enactment.

 

Item No. 7: Progress on national security. The prime minister referred once to the Maoist challenge as the country’s most serious internal security problem ever, perhaps because it exists in the geographical heart of India, not at some periphery, and also has considerable spread – over 160 districts (out of over 600), when the UPA came to power in 2004. It should be noted that the period when the Maoists spread out to those 160 districts was when the home minister was L.K. Advani, a supposed strongman who liked to think of himself as Sardar Patel’s successor. Since then, the problem has been contained, if not reduced in geographical scope, with newspaper reports saying recently that the Maoists were on the defensive after many of their senior leaders had been killed or captured. The primary credit for this would go to state governments, like Andhra Pradesh when under Congress rule post-2004 and to a lesser degree Odisha and others, but it is also true that the Centre has played a role by fielding its own forces as well as providing money, materials, training and other support services.

When you look at other security challenges, civil unrest in the Kashmir valley has been at a low, and in defence the government has made more progress than its predecessors in improving the country’s defence readiness – though it is still very much a work in progress. To counter the Chinese threat, more border roads are being built while new frontline air bases have been set up as well as two new army divisions, even as the creation of a new strike corps has been approved specifically to do battle in China’s Tibet (the existing three strike corps are focused on Pakistan). Many gaps in the defence wall remain, and there have been delays and scandals when it comes to the acquisition of hardware, but it is a point notched up for the UPA because on the whole it has done better than its predecessor. Also, no defence scandal has touched the political executive, unlike the NDA whose defence minister had to resign.

 

Item No. 8: A clear success is the revival of agricultural growth, which had dipped after the mid-1990s, but has recovered in the last 5-10 years. Agricultural output grew by nearly 50 per cent in the 1980s, but then stagnated for close to a decade from the mid-1990s. The subsequent recovery has been sharp, coinciding with the UPA years, marked by high growth rates. This has been helped by better monsoons, but the government has played a role by, among other things, sharply increasing procurement prices to make up for an earlier stagnation in these prices – one reason perhaps why there are fewer stories on farmer suicides.

In addition, there are flattering growth rates in the non-grain segment. Growth in the production of fruits and vegetables in the last decade has looked like industrial growth rates, averaging six per cent a year. Per capita availability, therefore, has gone up 50 per cent in 10 years. Milk production has averaged 4.5 per cent annual growth over the decade. Fish exports have doubled in five years. The production of pulses, after declining in the 1990s, has achieved a dramatic 56 per cent increase in production since 2000-01. Oilseeds production has soared by 62 per cent, while potato production has more than doubled since 2000-01, and maize production has gone up 80 per cent. Cotton beats everything, its production climbing from 9.5 million bales in 2000-01 to 35.2 million in 2011-12 – for which, thank the much criticised Bt cotton.

India has in fact emerged as an agricultural power. The production of wheat and rice may not have gone up as fast as other crops, but their output too has grown faster than population and, in the process, generated an export surplus. The country has become the world’s largest exporter of rice (17.75 million tonnes); export shipments of wheat are expected to total over 10 million tonnes. Despite such large-scale exports, the country has record grain stocks.

You could argue that the Singh government has done nothing, or little, to achieve any of this. Agriculture remains largely unreformed, and in any case it is a state subject. While conceding all this, the fact remains that significant diversification has happened in agriculture, most likely in response to market demand, and fortuitously or not it has happened during the UPA years.

 

Finally, there are what one might call the half successes, like the roads programme which got its initial push from the previous Vajpayee government. The Manmohan Singh government had set itself the excessively ambitious target of constructing 20 km of highway every day. It has managed barely six kilometres. Also, road construction has been bedevilled by problems – including massive cost overruns and Rs 9,000 crore worth of projects stuck in disputes, leading to half completed projects dotting the map as eyesores. These disputes and other issues have caused so much disillusionment among private firms that some Rs 27,000 crore of road projects today have no bidder! Still, it is worth listing as a half success because nearly 90 per cent of the national highway network (about 71,000 km) is now two lane or more, and headed for further widening. The improvements, especially on the stretches that are four and six laned (more than a quarter of the total, and including all the major trunk routes), are obvious – and a big relief – to any motorist.

 

There has been improvement in education, which has seen an increase in budgets and universal enrolment at primary level, a substantial increase in secondary enrolment, and significant initiatives in higher education, including half a dozen new IITs, and as many new IIMs. School infrastructure has been improved virtually across the board, and mid-day meal schemes expanded. The big disappointment has been the failure, despite all the new investments, to improve educational outcomes (tests have continued to show that over half the students in class V cannot do class II level tests). Meanwhile, the dramatic increase in supply of private seats for professional courses (engineering, medicine and management) has been dogged by serious questions about quality and price gouging – leading now to the beginnings of a shakeout as supply has exceeded demand.

Some of these would be included in the eight broad areas listed by the United Nations in 2000 as the Millennium Development Goals, and have specific targets for 2015, with 1990 as the base year for measuring progress. They include goals like reducing maternal mortality by 75%, reducing child mortality by 50%, eliminating gender disparity in school education, tackling diseases like Aids, and so on. The last decade has seen substantial progress on all these issues, so that many targets will be met by India when 2015 comes round, while on some it will fall marginally short. A substantial shortfall may be recorded only on the nutrition front. Since all the key goals will not be met, this too is a half success, but it is certainly creditable that so many targets will be hit, or missed by only a small margin.

 

In judging what is a success or not, one has to reckon with the fact that right from Independence, measurements every five or 10 years have shown that people are living longer, are more educated, in better health, and wealthier at the top while being less poor at the bottom. This is par for the course, and the country has rightly come to expect it as the norm – especially since the starting points were so low and India was (is still) way below the world average on most counts. The catch up scenario continues to hold good, two-thirds of a century after Independence, and a success story therefore is only that which does better than the norm, which marks a departure from the past by upping the rate of improvement.

From that perspective, the limited purpose of this article has been to show that, even if voters are getting ready to hoof it out of office, UPA rule has not been a complete waste of time. Rather, it has notched up successes that in many areas have improved on the record of previous governments, and raised the bar for future governments. The tragedy is that it could have done much more, especially in the areas of institutional and policy reform that would have prepared the ground for future growth; not left the economy in need of resuscitation, and with the sour smell of multiple scandals.

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