With the assembly elections for three major states around the corner, the parties have initiated their poll sops, making larger than life promises. Will the nation figure out who is right for them?

Assembly elections for the three major States of Madhya Pradesh, Chhattisgarh and Rajasthan scheduled for later this year to be followed by the General Election in early 2019 evoke very different reactions in the rulers and the ruled. The regular or garden variety of citizen is busy working hard to earn a living and will, perhaps, only apply her/his mind to issues shortly before exercising that one right s/he knows is the most powerful tool in a democracy — the right to vote. But political parties scrambling for that vote have a different take. Whether in the BJP or in the Congress, think-tanks have apparently done their research and are ready with policies which they feel will gain traction among the electorate. In a sad commentary on what our rulers think of us that sops top the list of both parties.

The Congress has apparently decided on the basis of a combination of empirical evidence and echo chamber generated data that unemployment rates, especially among the youth, are going to be a major issue in the forthcoming elections. Especially, as it believes the problem is one which the Narendra Modi Government has not been able to tackle effectively. Let us assume the Congress is right for the purpose of this argument. So, what is its solution? Unsurprisingly, it is the dole. The plan is that the state will provide a job guarantee — Back to the USSR! — to all educated youth in the 18-30 age bracket and if the Government fails to provide them a job commensurate with their qualifications, it will disburse a ‘respectable’ monthly allowance on the lines of provided in European countries, i.e. the dole. Scarily, the Congress policy planning unit is studying the MNREGA pattern before it finalises this scheme presumably in time for the forthcoming elections. The contours of this alternative employment-generation plan with a ‘youth focus’ are clear: Government as mai-baap will be back with a bang with the politics of patronage and rent-seeking built into the system. The cumulative effect of this approach, quite apart from the distortions such heavy-handed state intervention will introduce to the ability of the Indian economy to generate growth and employment in a free market paradigm, is likely to be disastrous. The Congress System which was dismantled by the 1991 reforms, is readying for a comeback by the looks of it. The ruling BJP, has its own demons to battle, however. Its go-to response, too, has been to guarantee crop prices for farmers, especially paddy, coarse grain and pulses cultivators at a cost to the exchequer of Rs Rs 15,000 crore. Now, nobody is arguing that an agricultural sector in deep crisis and farmer distress should not be addressed and the MSP of 1.5 times the input cost — though nobody can say how this cost will be calculated and/or can be uniform — promised by the Government in the Budget should certainly be paid. But how about simultaneously bringing the farm sector/agricultural income into the income tax net and spending the revenue thus accruing to the Government to at least part-compensate for the MSP spend? Naturally, sharecroppers and small landholders should be exempted just as there is an I-T exemption limit for others who earn very little. But those in a poll sop state of mind won’t be receptive to such suggestions.

Writer: The Pioneer

Courtesy: The Pioneer

With the assembly elections for three major states around the corner, the parties have initiated their poll sops, making larger than life promises. Will the nation figure out who is right for them?

Assembly elections for the three major States of Madhya Pradesh, Chhattisgarh and Rajasthan scheduled for later this year to be followed by the General Election in early 2019 evoke very different reactions in the rulers and the ruled. The regular or garden variety of citizen is busy working hard to earn a living and will, perhaps, only apply her/his mind to issues shortly before exercising that one right s/he knows is the most powerful tool in a democracy — the right to vote. But political parties scrambling for that vote have a different take. Whether in the BJP or in the Congress, think-tanks have apparently done their research and are ready with policies which they feel will gain traction among the electorate. In a sad commentary on what our rulers think of us that sops top the list of both parties.

The Congress has apparently decided on the basis of a combination of empirical evidence and echo chamber generated data that unemployment rates, especially among the youth, are going to be a major issue in the forthcoming elections. Especially, as it believes the problem is one which the Narendra Modi Government has not been able to tackle effectively. Let us assume the Congress is right for the purpose of this argument. So, what is its solution? Unsurprisingly, it is the dole. The plan is that the state will provide a job guarantee — Back to the USSR! — to all educated youth in the 18-30 age bracket and if the Government fails to provide them a job commensurate with their qualifications, it will disburse a ‘respectable’ monthly allowance on the lines of provided in European countries, i.e. the dole. Scarily, the Congress policy planning unit is studying the MNREGA pattern before it finalises this scheme presumably in time for the forthcoming elections. The contours of this alternative employment-generation plan with a ‘youth focus’ are clear: Government as mai-baap will be back with a bang with the politics of patronage and rent-seeking built into the system. The cumulative effect of this approach, quite apart from the distortions such heavy-handed state intervention will introduce to the ability of the Indian economy to generate growth and employment in a free market paradigm, is likely to be disastrous. The Congress System which was dismantled by the 1991 reforms, is readying for a comeback by the looks of it. The ruling BJP, has its own demons to battle, however. Its go-to response, too, has been to guarantee crop prices for farmers, especially paddy, coarse grain and pulses cultivators at a cost to the exchequer of Rs Rs 15,000 crore. Now, nobody is arguing that an agricultural sector in deep crisis and farmer distress should not be addressed and the MSP of 1.5 times the input cost — though nobody can say how this cost will be calculated and/or can be uniform — promised by the Government in the Budget should certainly be paid. But how about simultaneously bringing the farm sector/agricultural income into the income tax net and spending the revenue thus accruing to the Government to at least part-compensate for the MSP spend? Naturally, sharecroppers and small landholders should be exempted just as there is an I-T exemption limit for others who earn very little. But those in a poll sop state of mind won’t be receptive to such suggestions.

Writer: The Pioneer

Courtesy: The Pioneer