Congress success Election analysis Taking India Ahead

Congress back to left

Socialism is in the party’s DNA and in the very being of the Nehru-Gandhi family says Sidharth Bhatia in the DNA (Daily News and Analysis). The Congress is now going back to its Socialist roots.

Investors would do well to prepare themselves for large-scale spending on the social sector, usually perceived as a waste of precious resources. The emphasis will now be about the dusty tracks in rural India where Kalavati lives.

This shift is not simply because it has brought the party electoral dividends. It has become received wisdom to say that schemes like the National Rural Employment Guarantee Scheme made villagers so happy that they voted in droves for the Congress. But it is equally true that the Congress got votes because disgusted voters were turning away from the others who had nothing but old nostrums and tired clichés to peddle – Mayawati with her so-called Dalit card, the BJP with its Hindutva and the Left parties with their obstructionist attitudes. But why look at the villages alone — the Congress also performed well in cities where social welfare schemes are not implemented.

Read his entire analysis here:

When the Bombay stock market index went through the roof the Monday after the election results were declared on Saturday, forcing a shut down after barely a minute or two of automatic trading, the consensus was that the punters were expressing their unadulterated joy at the victory of the Congress.

And because now the UPA would not need the support of the Left parties.

Five years ago, the same markets had also shut down after the results were known, but that was because the indices crashed by over 8 per cent. So, the Left was clearly perceived as a party-pooper, the drag on the Indian economy and on ‘reforms.’

Reforms is the code word for all the things the markets and by extension, businessmen want – disinvestment of public sector units, changes in import policies, liberalisation of labour laws, etc. In the popular narrative, the Left parties had acted as a brake every time the Congress wanted to proceed with its reformist agenda. Without the Left to worry about, the Congress would steam ahead on the reforms track now; no wonder champagne corks were popping in boardrooms, in Dalal Street and on business television shows.

The markets are not rational beings and operate on their own logic, but one can safely say that they may be in for a nasty surprise. There is little doubt that the Congress will bring in reforms, primarily because it wants to, but it is wrong to assume that the last time round (2004-09) the reforms were held back merely because of pressure from the Left.

Investors would do well to prepare themselves for large-scale spending on the social sector, usually perceived as a waste of precious resources. The emphasis will now be about the dusty tracks in rural India where Kalavati lives.

This shift is not simply because it has brought the party electoral dividends. It has become received wisdom to say that schemes like the National Rural Employment Guarantee Scheme made villagers so happy that they voted in droves for the Congress. But it is equally true that the Congress got votes because disgusted voters were turning away from the others who had nothing but old nostrums and tired clichés to peddle – Mayawati with her so-called Dalit card, the BJP with its Hindutva and the Left parties with their obstructionist attitudes. But why look at the villages alone — the Congress also performed well in cities where social welfare schemes are not implemented.

Thus electoral compulsions are not the only reason for turning towards India’s vast hinterland at the expense of tax and duty breaks to businessmen. Those who think that the Congress has suddenly discovered the virtues of development after years of being a pro-business party are wrong.

This is Congress going back to its own roots, to its old leftist self. Socialism is in the Congress’s DNA and in the very being of the Nehru-Gandhi family. Under Nehru, who came under the influence of the British socialist movement of the early 20th century, the Congress brought about land reforms and set up large public sector companies; under Mrs Indira Gandhi the banks and the oil companies were nationalised and garibi hatao was launched; Rajiv Gandhi, the father of Indian economic liberalisation, introduced panchayati raj and now Sonia Gandhi dedicated the party to the cause of the aam aadmi. The next generation of the Gandhis has the same socialist gene and while the world may laugh at Rahul Gandhi’s discovery of village India and ‘gimmicks’ such as sleeping in a Dalit woman’s hut, he is making a point about the direction he wants the party to take. His loyal youth brigade, rich and privileged it may be, has happily fallen in line.

The BJP will never be able to emulate this tack because a) it is a right-wing party dedicated to the mercantile classes and b) because it has no leaders who can connect with the grassroots except on religious issues. The regional parties, including the caste-based organisations want to move towards urban India. Even the Left, once dedicated itself to rural India and the urban working class, has lost touch with its moorings. It has become dogmatic and does not have the flexibility to step outside its ideological framework – look at the mess it made of trying to bring in investment in West Bengal.

The Congress has the ability to continuously change shape and form and refocus its priorities as and when it wants to. It is a cultural thing too — the patrician, upper class mind of the Congress relates to the cause of the poor the best. At one time the CPM (and old CPI) had it; today they are bereft of that kind of leadership.

Manmohan Singh may be a “reformed” socialist and his natural instinct towards more economic liberalisation. His advisors, trained in the World Bank school of thinking, are unconvinced about the trickle-up theory and they will try and pull him away from the Congress’s more expensive adventures. But he knows which way his political bread is buttered, so don’t expect too many objections from him.

This will disappoint the business lobby and the market but it shouldn’t. Apart from the benefits of investing in the bottom of the pyramid and raising living and consumption standards, it is good in the long run. Besides, many policy initiatives that will please business will also be taken. But the party is about to take a left turn, whether anyone likes it or not.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s