The Lost Years

Good article by Subramanian Swamy in the Pioneer, dated March 10 2007. Posting in full as Pioneer doesn't archive...

The lost years

Subramanian Swamy

After Budget 2007, nostalgia for the NDA years is mounting, implying doom for the Communist-backed UPA

The India of today has the unmistakable attributes of a future world power. It has 1.3 million square miles of largely fertile land of differing regional climates that permit full 12 months of agriculture. The area could have been larger but for Jawaharlal Nehru's perfidy with Khaliquzzaman in 1937 and with Netaji in 1945.

The Indian armed forces are perhaps the fourth largest already, with demonstrated capacity to produce thermo-nuclear weapons that fit indigenously produced ICBMs, can place synchronous orbit-satellites, as easily as it can deploy a blue water navy in the very near future - thanks, in part, to the 1962 shock from the Chinese.

India is not yet an economically developed nation. This is because from 1950 to 1991 we were forced by the Nehrus to adopt a disastrous Soviet system of planning that has failed everywhere in the world, even in the Soviet Union - which no more exists ! Had we not, we would have been a developed nation by now.

While the Indian people have demonstrated prowess in IT software, biotech and pharmaceuticals, and thus helped accelerate the nation's growth rate to 9 per cent to become the third largest nation in terms of GDP at PPP rates, we are still suffering the Soviet legacy of a backward agricultural sector plagued by farmer suicides, a national unemployment rate of over 15 per cent, prevalence of child labour arising out of nearly 50 per cent of the children not making it to school beyond the fifth standard, a deeply malfunctioning primary and secondary educational system, 300 million illiterates and 250 million people in dire poverty.

India's infrastructure is pathetic, with frequent electric power break-downs even in metropolitan cities, dangerously unhealthy water supply in urban areas, galloping HIV infections and gaping pot holes on most of the National Highways.

India is also being subject to increasingly menacing insurgency in vast parts of the country, and is currently facing frequent violent attacks from at least seven different types of terrorist organisations, some religious, some ethnic, and some linguistic.

Internationally, India seems to have fewer friends and allies compared to the situation two years ago. This is highlighted by the recent derisive comments world wide about the advisability or prospects of an Indian candidate for the post of Secretary-General of the United Nations. In foreign affairs, India is in a confused transition from being a prominent pro-Soviet Third World country with strong allies among Left-leaning nations of West Asia, Africa and Latin America, to finding it's feet in the new world order.
The Cold War warriors of the UPA are fumbling between keeping the US at bay and being true to their past benefactors. India's claim to be a permanent veto-wielding member of the UN Security Council has not been taken seriously, occasionally endorsed tongue-in-cheek by a few nations.

Thus, the perspective on India's potential for future global power status is mixed. India is rising, as Foreign Affairs, the respected American journal, headlined recently. But, at the same time, ever since the UPA came to power, India is also haemorrhaging.

There is a contradiction in the Indian scene today between political compulsions of the UPA and national economic prerequisites that are required to be resolved soon. Political compulsions that exist are due to electoral politics. It has to be recognised that a quarter of Indians is still very poor -- in the below-the-poverty line category. They, along with the lower middle class, constitute about 40 per cent of the electorate. These are conscientious voters and turn out in large numbers to vote in elections than do the better-off sections.

Hence, to succeed, a reformer political leader needs to design reforms in such a way that these poor folks can perceive tangible gains from reforms as quickly as the vested interests - that are entrenched in the power structure thanks to 40 years of Soviet-style planning - count their losses.

This is not an easy task for the UPA, since the Congress and the Communists have been weaned on the Soviet system of quotas and permits, earning commissions and rents by their proximity to power. Under any reforms, this rentier class loses first. Gains from reforms come with a time lag for others and thus the poor see the gains from reforms late.

Hence, this vested interest rentier class that the UPA represents can combine with the unsuspecting poor by vicious propaganda to defeat any reformist Government, including their own -- Narasimha Rao's -- in an election.

That is why, despite the growth rate accelerating during the latter half of the NDA era, a decline in poverty ratio from 26.1 per cent of the population in 1999-2000 to 22 per cent in 2004, a stable price level, rising forex reserves, the 'shining India' slogan was defeated in the elections in 2004 by bogus aam admi claims.

What we have today in the name of aam admi is the loot of the economic surpluses through rigged stock market booms and crashes, forward trading, yojanas named after various Nehrus, galloping inflation due to forward trading of foodgrain and siphoning off of money abroad through financial instruments such as Participatory Notes.

But the UPA is losing provincial and local bodies' elections today, not because of these economic failures, but because of other reasons. To shift the blame to the Prime Minister, Ms Sonia Gandhi may argue that inflation was the cause of the UPA's defeat in the recent elections, but the rise of the BJP in Maharashtra, Punjab, Uttarakhand, and probably in UP, and most likely on present trends in the next Lok Sabha general elections as well, is due to a nascent nationalist backlash caused by the UPA's brazen disregard for national security. This is manifested in the Mohammed Afzal case, Quattrocchi escapes, Sachar's fraud, and most importantly, the foreign affairs sell-out to Pakistan.

In other words, one of the consequences of the nationalist consolidation caused by the backlash is voter unity across the income brackets. Hence, those sections who have been manipulated by the UPA-Left combine today to discredit the reforms as a "sell-out" to capitalists, would, by the imminent nationalist backlash, electorally switch to a relatively more pro-reformist coalition. It would turn Karl Marx on his head, that is, instead of economics being the driving force of politics, economics will be driven by nationalism.

--The writer is a former Union Minister