At sea in the economy

The Congress party's decision to team up with the Trinamul Congress in West Bengal for the coming General Elections cannot fail to give the party a much-needed shot in the arm. The two parties together stand more than an even chance of wresting West Bengal away from the Left Front.

In the 2006 state assembly elections the Congress-Trinamul alliance polled only 8.8 per cent less that the Left Front. A shift in the vote of five per cent will therefore suffice for it to win a  majority of the seats. Since then, as recent panchayat elections have shown, the Trinamul Congress has grown rapidly in strength. This alliance could therefore decide who rules India three months from now.

But India would be the poorer if the Congress treats this merely as an alliance of convenience and does not absorb some of the political philosophy that underlies  the Trinamul's growing ascendancy. For the Trinamul can help to revive something that the aged, and now manifestly elitist, Congress has demonstrably lost. This is a heart that beats for the poor.  

This allegation may sound strange: hasn't the Congress quadrupled the outlays on health education and rural development in the past five years? Hasn't it started the National Rural Employment Guarantee Scheme? And hasn't it launched targeted 'missions' to ensure that the money actually reaches the intended beneficiaries?  The answer is that it has done all these things but has remained firmly elitist nonetheless. A close look at  the programmes shows why: all of them, without exception, are top-down, therefore paternalistic.

They  create no legally enforceable rights for the beneficiaries, place no reciprocal obligations upon them, and therefore do nothing to empower them. They remain what all such programmes have always been-handouts to the poor. Their purpose has remained quintessentially conservative - to preserve the ascendancy of the urban -industrial elite by keeping  the poor in their place. Since all the power and rights have remained squarely in the hands of the fund -givers, it is no surprise that nine-tenths of it has continued to stick to their hands on the way down to the intended beneficiaries.

The Trinamul too started as a 'standard , 'paternalistic' political party.  But under the spur of recent developments in West Bengal it has developed into a different animal. Today it is the only party that  is fighting not just for benefits for the poor but for their rights; not just to secure just a few more scraps from the table  but the  right to sit at it.  It has shown this in Singur and Nandigram, where it has doggedly maintained that land and cultivation rights cannot be taken away from owners without securing their explicit consent, and that mercilessly flailing police lathis falling on the backs of alleged troublemakers and Maoists, is not the way to secure it. 

The Trinamul's success in stopping the Tatas' 'Nano' car project was greeted with horror by organised  industry and dismay by the government of West Bengal,  which had gone out onto a limb to meet Tatas' requirements.  But in the long run far more good than harm is likely to come out of it, for the party has shown  that despite India's transformation into a market-dominated, free enterprise, economy that makes no pretense of socialism it is still possible for  the poor to find champions  within its democracy.  From this it is but a small step to concluding that they can fight democratically to defend existing  rights or to acquire new ones, and that they therefore have no need to resort to violence. This is precisely the faith that the poor have been losing during the past decade. The loss is reflected in the growing violence and rapid spread of Maoism in central India and the chronic insurrection in the north east.

The onset of global recession has made what was still a threat in the future into an immediate one. Literally all and more of the growth of employment since the 1991 economic reforms has taken place in the unorganised sector. During the past decade this has grown at a healthy pace of more than five per cent a year. But  these new workers enjoy absolutely no protection against adversity. Having lost their moorings in the overpopulated, comparatively stagnant countryside they have flocked into the towns in search of work. The acceleration of growth since 1993 and the very high rates of the past five years, and the concentration of this growth in the towns shielded them from adversity, but that golden period has ended with terrifying suddenness.

The UPA government has been in denial for the best part of three months. It first claimed that India would get off very lightly from the global recession. But that fond belief was exploded a few days ago when the estimate of growth between October and December was slashed to 5.3 per cent. Judging from what is happening elsewhere January to March could be even worse. The worst hit are the export industries, but as a recent searing expose in the Indian Express of the panic that is seizing the formerly thriving slum of Dharavi in Mumbai shows, the damage is spreading rapidly to domestic industry as well.

India's policy makers have shielded themselves from blame because, unlike China, they do not collect data for the unorganised sector more than once every five years. But policy makers do not need detailed statistics to know what is happening to the economy, and the people know it. The UPA government has frittered away the best part of five months  doing just a little too little, just a little too late. As a result the spread of recession and the fear that stops people from spending has always kept one step ahead of their reflationary policies.

Even today, the Reserve bank continues to drag its heels over lowering the cash reserve ratio and Repo rates dramatically because it is more concerned with preventing a fall in the exchange rate than in saving jobs and growth. Unless it suffers a dramatic change of heart it is difficult to see how the UPA  will prevent a political backlash from the sliding economy.