13 August, 2020

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Aam Aadmi Party (AAP) And The Lure Of Populism

By S. Sivathasan

S. Sivathasan

S. Sivathasan

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Because Aam Aadmi postured moral high ground and flaunted a leaning towards a clean image, it received a remarkable confidence vote to be elected the second largest party in Delhi, the National Capital Region. However its first infraction of principle was brought about by the party itself. Its claim to election was its portrayal of Congress as a party perceived to be tainted. Yet, after the Congress was rejected on that score it forged an alliance with that very party in order to be in the seat of power. Birth marks are difficult to conceal and when they are on the face, visibility is high. When the beginning is squeered, everything becomes so, goes a Tamil saying. AAP has enlisted that disability. When it is ever conscious of that, it has to seek votes by other means. Herein comes  ubiquitous populism, to edge out economic principles as the sheet anchor of good governance. This has already happened.

“Creating, Consolidating, conserving and distributing wealth, are four tasks in governance” – Thirukkural.

To what degree do we see them in the announcements made by AAP since its placement in authority in Delhi? Part subsidy in water use to a segment of the Delhi population at an estimated cost of Rs. 3.5 billion is already announced. Also announced is a similar payment waiver for consumption of electricity. Were such measures unknown to previous Delhi administrations? The announcement of land titles for illicit occupation has only to take precise form. Regularisation of encroachments is a term for extending legality to default of non-removal by earlier regimes. It’s a stamp of permanency for slums as a legitimate part of the nation’s metropolis. If so much in so short a time, won’t there be a cascade in the months to come?

FDI And MNCs

A major policy decision on Foreign Direct Investment (FDI) has also been announced in rejecting it for retail trade. The first fault was to have declared it without the concurrence of the alliance partner though AAP is a minority government. A 40% seat win is not a clear mandate for a unilateral policy declaration. The decision is on weak ground since the alliance partner is opposed to this policy and had decided in favour while in power.

The more serious aspect to it is that as the Indian economy gets modernized, FDI becoming an integral part of India’s economic philosophy and programme is inescapable. Playing the ‘Luddite’ role of breaking up or opposing it can only delay its foray. Retail was only MM Singh’s accommodation for a while till India is ready for the full flush of FDI and MNCs. About three years back the Prime Minister spoke about the importance of foreign capital in trade. He said that modernizing trade would imply cold chains, refrigerated transport and a retail network. Half a billion dollars are needed in investment and neither the govt. nor the private sector had it. Foreign capital alone commanded it.

It is widely known that the first spate of economic reforms of the early nineties was spearheaded by Singh and Rao. The benefits are immeasurable. A year back Obama said very correctly that India awaits the second phase of reforms. The advice did not fall on sympathetic ears. Forward thinking should be from the capital. Decades ago it used to be said that what Bengal said today, India said tomorrow. It was implicit that Bengal was the intellectual capital of India at that time. Today Delhi has to blazon forth as the capital in many respects. Modi it is expected will endow that role to Delhi. AAP will have to go in tandem for a share in progress.

Slippery Incline

A foot on the slippery incline of populism will drag down anybody placed in authority. Transport is next. Both road and rail come in. People of Tamil Nadu are paying for the populist theatricals of successive governments. Both the CMs have given them low fares in exchange for rickety buses and total inadequacy. Rail transport suffers because TN is unable to finance more facilities or extensions when the centre requests. For certain new lines as for Sriperumbudur, nothing has happened for more than a decade much to the disappointment of investors.

When Lee Kwan Yew relinquished his duties as PM he instituted checks on likely profligacy. Quite correctly he picked out transport for the foray of the populist politician. It is cheap transport which the people want and we must give it to them. Thus the argument would run and the treasury will be bankrupted. He prevented facile frittering away of hard saved resources. It is into such tills that some parties venture to put their hands. To identify areas of populism possibilities are infinite. If AAP’s populism has free run, it will spread to subsidized fares for bus, rail and even the Delhi Metro, now the pride of Delhi and of India. Altruism would demand that all such temptations are destroyed.

A clamour to knock the basis out of sharing wealth has been there in many societies from early times. In ancient Rome Patricians and Plebians were in opposing camps. Immediately after the revolution, the communists in Russia expressed their belief literally in each according to his ability to each according to his needs. Lenin’s iron tenet, he who does not work, neither shall he eat prevailed. A state’s wealth derived from levies and a state’s land resources  are both social. A placid announcement of being liberal with them smacks of levity. There is a strange belief with people gaining new power and brief authority, to think that wealth gushes forth in a state through a dynamic of its own, effortlessly and endlessly. Those elected have only to employ their intelligence to spread it across in a display of munificence.

Lee Kwan Yew wisely veered from it and Singapore is among the wealthiest and most disciplined. Sri Lanka in contrast is in the doldrums constantly for taking the path of least resistance interminably. “Welfare expenditure of 16.4% in late nineteen twenties increased in 1947 to 56.1%. A handsome surplus in1945 to a heavy deficit in 1947”. – Ceylon Journal of Historical and Social Studies. As of now welfare expenditure together with freebies and subsidies has burgeoned into a huge amount disproportionate to the nation’s income. Cumulative public debt is Rs.7 trillion at 78% of GDP. The country is now saddled with the twin evil features of inflation and depreciating currency. Singapore $1/- was Ceylon Re 1/- in 1965. Today 1 Sing $ = SL Rs.105/-.

Tamil Nadu maintains an unholy alliance with SL resorting to absolutely unnecessary, wasteful and profligate expenditure. Though debt is manageable, budget discipline is maintained and deficit is under control, yet freebies and subsidies are excessive. The two parties in their greed to have two successive terms have vied with each other for more than 20 years to bribe the voter this way and failed to have them even once. In the miserable failure at appreciable economic performance and good governance, they have been thrown out remorselessly by an intelligent electorate.

If Aam Aadmi Party desires to develop a national perspective it has to be totally different. In every state and the country, policy and principle should claim precedence. This can never be if addressing the gallery becomes primary.

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    Lee Kwan Yew wisely veered from it and Singapore is among the wealthiest and most disciplined. Sri Lanka in contrast is in the doldrums constantly for taking the path of least resistance interminably. “Welfare expenditure of 16.4% in late nineteen twenties increased in 1947 to 56.1%. A handsome surplus in 1945 to a heavy deficit in 1947”. – Ceylon Journal of Historical and Social Studies.

    Until 1972 SL was ahead of Singapore it GDP per capita. 1972 Socialist experiment ruined it all.

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      If the reference is to the UF Govt. of 1970 to 1977 it has to be said that there was no ‘Socialism’ practised at all during the period. It was all ‘State-controlled Capitalism’. Profit-making private businesses, like Insurance, Textiles, etc. were brought under the ‘Govt.’s Political Control’ in the guise of ‘Nationalisation’, Govt.’s political henchmen were appointed as Chairmen and Directors who became came rich overnight by means of their corrupt activities. They ruined those enterprises. Despite the vast amount of generous financial, expertise and other facilities provided by the Sociliast and Eastern block countries, all industries failed, agriculture failed and corruption became rampant. Consequently the cost of living became intolerable and people had to wait in queues to obtain everything beginning from Infant Milk, rice and even for the cloth to make an ambuday. That was the fake socialism of the 1970-77 UF Govt. It was not a ‘Socialist Experiment’ at all. So let us not blame ‘True Socialism’ for the ruination during 1970-77.

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    Dear Author,

    Can you explain what do you mean by your statement “Tamil Nadu maintains an unholy alliance with SL resorting to absolutely unnecessary, wasteful and profligate expenditure.” ?

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      Manisekaran

      In 1944, when I was in LKG there was an announcement for the students to bring a plate each from the following day. At lunch interval we were treated to bread and sambol and keerai alternated with it. To some this was government’s munificence and to some others it was redistributive social justice in its most charitable form. To the critical this expenditure was saveable to provide better education. To them a Milton Friedman was not needed to point out that there was No Free Lunch. To yet others it was the first step on the slippery incline. The next act of benevolence was subsidized rice from about the same time. The last stop will be irretrievable superseding the unstoppable till bottomless perdition overtakes.

      I believe you know that India is first in milk production globally for a decade or more. Are you aware that it could have been derailed as early as in the fifties? Nestle offered milk as donation. Nehru in his wisdom and with foresight rejected it preferring cash instead so that India could develop her dairy industry. He requested Nestle to meet Dr. Kurien who was on a venture for the white revolution and his decision was indigenous milk production. To Dr. K a Mechanical Engineer, milk had become a vocation. For the revolution he put his finger at price as giving the greatest leverage. He told me personally that at an agricultural exhibition in 1962, he had a lengthy discussion with the Minister Lal Bahadur Shastri and past midnight, it was agreed that an attractive price will be paid. Nehru was PM, decision was taken and it took nearly 4 decades for 1st position. Populism never lured Nehru.

      Kamaraj in his early days as Chief Minister stopped his entourage and inquired cynically about the siren, why the conch was being sounded when he was alive and stopped it forthwith. Then and there he pared his escort as wasteful adding: Danger to Me? Chief Minister? In Tamil Nadu? Every cent had to be frugally spent was Kamaraj’s article of faith.

      What did MK do from 2006? Rs 28 billion on free TV, besides several other profligacies. What is JJ doing now? Free mixer, grinder by the million, computers by the lakh or million and several other profligacies. In Sri Lanka numbers beyond enumeration and amounts defying estimation. No partnership was meant, no action in tandem was implied. Even across the Straits there was and is unwholesome vying with one another in this criminal waste.

      Singapore’s very first budget was a frugal surplus one, so that in 4 decades a profligate state will buy a Sing. $ in the ratio of 100:1.

      SS

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    Thank you sir, for the detailed explanation.
    Yes, the populist measures adopted today by both Dravidian parties are condemnable, to put it mildly. The measure taken by the great leader Dr. Kamaraj in providing mid-day meals in schools to uplift the downtrodden people through education was visionary. I had benefitted from studying in one of such government schools and a governmnet college, then at IIT (This too was brought to chennai by that legendary leader who compelled Nehru to allow IIT in chennai which was supposed to be constructed in Hyderabad). I too had pinned hopes on AAP but looking at their retrograde populist measures, I am disappointed. Now Mr. Modi looks attractive leader, and his interview about framing next set of economic goals and tax terrorism and tax reforms was in fact splendid.

    I am too disappointed with the current government schemes like fan, mixer, however free laptops to students should be welcome.

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    Sorry to have prefixed “Dr” to before Kamaraj name.

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