Saturday, December 3, 2011

Two generations of Leftist rule in Bengal….and even Mamata behaves like one now….

Thirty five years is a hell of a long time. It’s almost as long as two full generations. In two generations, the entire culture of a place can change. Or at least start to change. That’s what we are seeing in Bengal. If you thought that the people of the state had thrown out the Left, think again. What they have got (I don’t think this is what they opted for) is just another version of the Left, for Mamata – at least on economic issues – is no different from the Left.

How strange that even though the erstwhile Secretary General of FICCI – a representative body of corporate India – and a known liberalist, Dr Amit Mitra is now the Finance Minister of Bengal, he is forced to take the cudgels against the big business and big corporates. For opposing FDI in retail is akin to opposing business itself. Not one corporate head honcho, not one trade federation has said that FDI in retail is unwelcome. But Dr. Mitra hardly has any room for expressing his own views in today’s politics. As Finance Minister of Bengal, he has to tow the aggressive anti-business line of his boss.

But then what can one expect in Bengal – a state which has been under Leftist rule for so long that it would appear that the entire thinking in the state has become Leftist. The alternative to the Left is perhaps only a partially lighter version of the Left. Sometimes when Mamata speaks, it becomes difficult to figure out who really is speaking – the Left or the TMC. Is it she – an opponent of the Left, or her 35 years of growing up under Leftist ideology that is speaking? Some would find Mamata to be more Leftist that the Leftists themselves for while the Leftists were sticking to their centuries old ideology in Delhi, their CM in Kolkata, Buddhadeb Bhattacharya was slowly turning into a neighborhood capitalist, wooing the Tatas and the Biyanis to enter his state and literally set shop. It was Mamata who shooed them out of Bengal then. And it is Mamata who is shooing out big business from India now. Who’s the bigger communist? Mamata or Buddhadeb?

If its two generations of Leftists who have made Bengal perennially Leftist, it is nearly four decades of socialists that has made India perennially socialist. Even in 1991, when India finally embraced small bits of private capital, it did so grudgingly. It did so because its back was to the wall. Had it had the option of raising resources from friendly socialist countries (unfortunately, Russia was in disarray at that time), it would have preferred that to opening up the economy. Today, everyone talks of the economic miracle that is India. However, in spite of two decades of reforms, there is a large majority of politicians who feel wedded to socialistic beliefs.

I think people change faster than politicians do. We see this often in the media industry – where a new newspaper enters a city and shakes up the incumbent. A new TV channel enters the General Entertainment space and rises to the number 1 position. People want rapid change, and when incumbents fail to give that, new players come in to grab the space. That’s what happened in 2009 when the people wanted a progressive Indo-US nuclear deal to go through – the deal was much more than a mere nuclear deal; it was indicative of a whole new way of governance itself. Both the Left and the BJP opposed the deal. Both were routed in those elections. Had the PM then not stood his ground, chances are that his party would also have lost the elections. That’s the message that the political parties fail to see. That the people want rapid change; those who bring in change will succeed. Those who don’t will be thrown out.

Apparently, the farmer’s body has backed the proposal for FDI in retail in a meeting it had with Anand Sharma yesterday. Of course, it will. Farmers are the ones who are exploited by the middlemen. A farmer on an NDTV show last night said as much. Rs 2 a kg is what he gets for tomatoes; but Rs 40 a kg is what the consumer pays. He thinks the consumer holds him responsible for the high pricing, when in reality the poor man is hardly making anything at all. Who makes all the gains in-between? The middle-men who may be 4 crore by number – but who are twenty five times smaller than the community of farmers and consumers put together. Strangely, most political parties prefer to paint FDI as an anti-farmer move, when the farmers themselves are seeing it as pro-farmer. Are the politicians missing something here? What about consumers? What happened to the BJP’s core constituency of urban middle-class folks? I haven’t seen a single opponent of FDI in retail in urban areas. Both my posts on FDI got rated 4+ when the average rating that I manage is between 2 and 3! A blogpost by Swaminathan Iyer explains why politicians support the aam baniya to the aam aadmi. The aam baniya is far better organized than the aam aadmi is. While this is true, what is equally true is that the aam aadmi organizes himself at the time of voting. The aam aadmi wants change and that’s the way he votes.

Like the TOI story indicates today, Indian corporate houses are busy investing in retail businesses abroad. Business goes where it is welcome. The larger message that the BJP’s and Mamata’s obstruction has sent to corporate India is that India has become a fractious country. There is no certainty of what economic policies any future government will follow. This wasn’t the case between 1991 and 2009 when both the BJP and the Congress followed policies of liberalization. From a businessman’s point of view, that has changed. He expects policies in the future to be dictated by the politics of the day, not by the ideology of the party. Do you think Kishore Biyani feels happy with the developments of the last week? He must be worried about protests now against his group. After all, his company is bigger than what Walmart would perhaps even dream of being in India. Whatever accusations were levied against foreign retail stores, are equally true against Biyani’s outlets. Maybe Biyani himself will choose to invest abroad rather than doing so here. What happens to employment then? I guess the educated youth will turn into kiran store attendants now…..

That Indian corporates are looking outwards has been known for some time now. Rahul Bajaj has spoken of shifting his manufacturing unit outside India. If not the present plant, maybe the next one may come up in China or Vietnam. No one wants to have nuclear power plants in their state; so maybe we’ll set up those in Sri Lanka. Since mining is such a big mess in India, most corporates are happier buying coal mines in Indonesia and Africa rather than in India. Likewise, since agriculture is out of bounds for corporates in India, they are investing abroad (TOI story says some $1.8 billion was invested abroad in the last year). With a political climate like this, who wants to make long term investments in India? It’s not about the high interest rates. It’s not about the slipping dollar. It’s largely about the political and economic sentiment in the country that is driving business out. Two decades of reforms could be junked by one decade of obdurate politics.

So as the government licks its wounds, what does it augur for the country? An extended period of policy freeze. Even if the government were to muster the courage to re-introduce the proposal for FDI in retail, that will be a few months or years later. In the meantime, the new Anna agitation is going to start. Since Anna is seeing Rahul Gandhi’s ghost in every decision of the Standing Committee, the future target of that agitation is clear. With some crucial state elections round the corner, I think we will see an extended spell of pure politics. In the meantime, everyone is forecasting that the Indian economic growth will slip even further…..

The real truth is that it is not the BJP or Mamata who have won, or the Congress that has lost. Nearly 100 crore people of this country have lost out to the politics of the day. The youth who could have been employed with dignity in the new retail outlets will have to be satisfied with working at the centuries-old neighborhood kirana store. The consumers and the farmers will continue to remain at the mercy of the middlemen. Maybe they should come out on the streets demanding change…..that and that alone will shake the somnolence of our political parties

1 comment:

  1. Brilliantly voiced out Prashant.....

    Politicians/parties need to understand quickly (before all of us loose out), that their old phenomenon of creating a ruckus every time on even good policies will just not do good for neither country nor them......

    Politics now needs to be re-defined/re-segmented in a purely simple one line - "Anything apart from economic growth is the area where-in we'll do politics"

    Hope people start voicing this out immediately.