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Tuesday 2 April 2013

WHAT THE POLLS MAY BRING - A possible BJP agenda if it wins the general elections Commentarao: S.L. Rao


- A possible BJP agenda if it wins the general elections
Commentarao: S.L. Rao
A Bharatiya Janata Party-led alliance might win the elections in 2014 or earlier. What will the new government's policies be? The BJP has, over the 10 years in opposition to the United Progressive Alliance, taken many positions against its policies. Many of these may not easily be reversed when the BJP is in power. Earlier, Atal Bihari Vajpayee was able to smooth over such inconsistencies. He did this to the great benefit of India, memorably on two major policies. He followed whole-heartedly the economic reforms track of the P.V. Narasimha Rao government. He extended the hand of friendship and peace to Pakistan in spite of its aggressive talk and actions. But Vajpayee is not available and no one of his shrewdness, few words, stature and statecraft is around. Narendra Modi, Yashwant Sinha, Rajnath Singh, Sushma Swaraj et al are lesser figures, with neither the same stature nor the articulation and clear objectives that put development and peace at the top. Among the BJP's old allies, perhaps Nitish Kumar might develop into a Vajapayee. But the BJP will not accept him, given the hostility between him and Modi.
The BJP has been very aggressive in its rhetoric in responding to Pakistani actions and what it calls the 'timid' responses of the UPA government. We must expect a more abrasive and aggressive stance in relation to Pakistan. Cross-border skirmishes will increase. The BJP will desperately look for muted military responses. Covert Indian operations might increase significantly within Pakistan. On the backburner will go a more relaxed visa regime, greater people-to-people contacts, more tourism and so on. Trade and investment are unlikely to grow. This is a pity since it could make for cheaper goods into Pakistan from India, greater access to natural resources from Baluchistan and other provinces and a share in the Iran gas pipeline. These non-events will hurt our economy.
Bangladesh has already become a tale of missed opportunities, thanks to the obduracy of Mamata Banerjee and the extremism of Begum Khaleda Zia. A secure border with Bangladesh could control the huge migration into India. It would open the river route to the Northeast and enable its development, especially in getting natural resources out at low cost, and also energy. The BJP will be unable to pursue these initiatives, especially if Begum Zia and her supporters come to power later this year. This is a pity, since it would have added to our resources, brought costs down and helped develop the Northeast.
Sri Lanka is one country regarding which the BJP has realized the inconsistency of fighting for Sri Lankan Tamils while wanting to safeguard our interests in Kashmir and elsewhere. Hopefully, it has grasped Vajpayee's understanding of the encircling India strategy of China. The UPA's need for Dravida Munnetra Kazhagam support makes it sympathetic to DMK demands for mercy to Rajiv Gandhi's assassins and for support to foreign nationals, which is how Tamils in Sri Lanka must be regarded. Vajpayee would not have allowed policies for the fractious relations with Sri Lanka, Nepal, and Maldives.
The benefits of good relations with our South Asian neighbours lie in improved trade and investment. The BJP can stimulate this if it is able to cover its hostility to Muslims and Muslim countries in our region. The BJP in office was as ineffective as the UPA in gathering, analysing, sharing and acting quickly upon intelligence in dealing with terrorism — from Maoists, militants in Jammu and Kasmir and the Northeast. The BJP is more likely to impose restrictions on our Muslim population. This will disturb law and order, the economy, and equality of treatment to all citizens. The resulting pall of fear in Muslim localities is detrimental to internal peace and stability.
Gujarat under Modi has shown that the Muslim bloodletting of 2002 cowed Muslim resistance to a Hindu-majority inclined government. It led to the absence of such law and order problems but no massive upsurge in Muslim wellbeing. This result could spread over the rest of India under a new BJP government.
Vajpayee's graciousness in dealing with the Gandhi family will be history. The BJP will now pursue its 'crimes'. The various scams in telecommunications, coal, arms purchases and so on will be vigorously prosecuted. Unlike earlier governments, which had interminable commissions of inquiry, it may go to the courts. Today's high-profile ministers, Congress partymen and bureaucrats will have to defend themselves. Some dirty linen will fall out and hurt the Congress further, even if few cases are proven.
This judicial hunt could lead to bureaucratic paralysis. The answer has been staring at us for decades — speedy administrative reforms. Detailed blueprints exist in the many reports of the administrative reforms commissions, especially those headed by Morarji Desai and Veerappa Moily. We must have bureaucratic accountability, speedy justice and administrative procedural reforms. The BJP has no ideological bias; unlike the Congress, whose close links to the bureaucracy prevented such reforms.
Given the BJP's parliamentary behaviour in the last few years, the Congress will ensure similar turbulence. Little fresh legislation will be passed. Better led state-governments will initiate their own reforms. The states are at the heart of the poor implementation and theft of public funds. New national leaderships will emerge from this.
In economic policies Vajpayee wisely continued Narasimha Rao's liberalization (tax reforms and reductions, delicensing and so on). He added the stimulus of large infrastructure expenditures. A BJP-led government will build on public private partnerships pioneered by the UPA. Vajpayee's innovative social welfare schemes, like mass education, went mad under the UPA, with huge corruption and fiscal deficits. The BJP might learn from this.
The BJP in power did little to stimulate foreign direct investment. Nor did it try to change foreign institutional investment in equity into direct investment in new manufacturing. It did not close the loopholes of investments routed (free of capital gains tax) through Mauritius and other small countries, nor the invidious participatory notes. Both have become instruments for money laundering and volatility in the stock markets and exchange rates. Given the vested interests of politicians and the bureaucracy, this preference for FIIs may continue. Perhaps, however, the BJP has less to lose than the Congress and its friendly bureaucrats who amassed vast wealth overseas by these routes. If the BJP clamps down, volatility in markets and exchange rates will ease. This will stimulate both domestic and foreign investment.
The BJP in Opposition was vociferously against FDI in retail and some other sectors. In office, it has to encourage and ease foreign fund inflows that are stable and not volatile, and in all sectors. But the party's attitudes for the last decade have to be reversed. A reversal is possible. After all, the BJP in earlier years was against foreign investment ("yes to computer chips, no to potato chips") but relaxed on this when in the National Democratic Alliance. It will, when in power, see the need for it.
The BJP will embark on a massive programme of privatization to release the resources locked into the public sector. It will also stimulate the economy as these dormant enterprises get fresh life and entrepreneurship from private ownership. As coal, oil and gas, power, steel, aluminum, tourism, perhaps even railways and airlines, become privatized we can expect a significant boost to the economy. These resources released from public enterprises must go into social expenditures on health, education, skills development, livelihoods enhancement, and not, as the Congress does, to bridge deficits. These social investments and infrastructure investments will stimulate the economy.
The BJP in power might have brittle relations with neighbours. But it could, in economic policies, make India more responsive to enterprise and less so to bureaucratic procedures.
The author is former director general, National Council of Applied Economic Research

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