Economics and elections!!!

Over the next few weeks, we will witness one of the biggest 'melas' that happens across the world. Though it may not be the same fodder for the global media as the American presidential elections, the elections to the Lower House of the Indian parliament is much more fun, and is contested with much more passion and gusto. The stage is already set for this drama, and the innumerable characters are well-versed about their roles. The audience is left gasping with the twists and turns that abound in this circus. My, my.....I can hardly wait to see the grand finale, which I am sure will be no less spectacular.

Few countries have successfully managed liberalising the economy within an established democratic order...India has been attempting this tranformation with mixed results since 1991; this is commendable since free market fundas and established Indian democratic norms are not that easily aligned. India was established as a socialist country characterized by extensive regulations (Licence Raj) and protectionism leading to a slow growth of rate (derisively called the Hindu rate of growth). J R D Tata held 2 things responsible for this slow growth, the socialist policies which he said only lead to redistribution of poverty, and high population growth.The 5-year plans were copies of already existing plans from the Soviet Union. Major industries were nationalised from 1950's onwards. However anti-capitalistic was the stance of the government at that time, it was American help that lead to the Green Revolution which made India self-sufficient in food grains and saved so many of the poor people from inherent starvation; rather than any existing government policies. So much for socialism and its so-called pro-poor policies!!!

As of 1991, India was on the brink of economic collapse. The government was close to defaulting and foreign reserves were so less that India could finance only 3 weeks worth of imports. This prompted the government to usher in several reforms which has been called as liberalisation. The impact was that FDI's increased phenomenally, and invester confidence increased. As a whole, it was a avery good thing to happen, and most of us that belong to the middle class owe our jobs to those policies from 1991 and later.

In the upcoming elections, all the political parties will have their own manifestoes which will include a host of promises, mostly economical. These will range from rice at 2 rupees to free televisions. Some will state what will do regarding the nuclear pact that was recently signed...others about reduced income taxes and implementations of pay commissions. But not a single party will talk about bringing in more reforms. There are 2 basic reasons for this...one, none of the parties actually know what the public really thinks about Indian economics; as per me, it is mostly about what the public KNOWS about it. Second reason is these parties wouldn't know as of now as to with whom they will be forming post-poll alliances. What if they have to form a coalition with the communist parties as Congress had to in 2004? So there goes your ideology out of the window along with the colourful manifestoes!!! Clearly, the relationship between Indian democracy and Indian economics is of a love-hate sort. Proponents of the erstwhile socialist model have always been at loggerheads with the implementers of free trade; and this rivalry is more clearly seen and heard at election times resulting in none of the parties being able to frame a proper economic model for them to follow; and once they come to power, the coalition allies do not let them implement a single proper policy. Too many cooks do spoil the broth, and it is the general populace that has to suffer the stomach aches due to this mixed 'khichdi'!!!