Right Price, Rice Price: Competitive Populism in the 2009 Election

The Congress and the BJP have learned much from NT Rama Rao. In the early 1980’s Rao decided to cheapen the price of a kg of rice to Rs 2 after discovering that the state of Andhra Pradesh, one of the leading producers of rice in India, also housed an agricultural labor population that could not access rice due to inefficiencies and corruption in the public distribution system of the state. In the current election the Congress (I) has promised 25 kg of rice or wheat at Rs 3 per kg for all families below the poverty line. It also pledged to abolish all central and state level indirect taxes and introduce a moderate goods and services tax (GST). Not be left behind, the Bharatiya Janta Party (BJP) has promised 35 kg of rice or wheat at Rs 2 per kg to BPL families along with income tax exemptions of up to Rs 3 lakhs for the salaried class, complete exemption from income tax for jawans plus one rank, one pension for ex-servicemen, waiving of agricultural loans interest ceiling on the same at 4 per cent. In short, our national parties have been promising populist policy measures to win the electoral affections of the voting population.

Populism, as a term, has been used very loosely to apply to all brands of “catch all” politics. It has often been seen as a concept that addresses the need for an assertion of those groups who have limited access to certain spheres of state and society. Populism is not a one-dimensional phenomenon and has been found to be quite compatible with various brands of politics and regime types including fascism and socialism. It involves political, economic and socio-cultural posturing aimed at influencing or capturing the imagination and loyalties of voters either by envisioning a new national or political order and/or by offering broad incentives to groups. In recent years many have come to associate populism with economic policies, tax breaks, etc.

In the last century in India, Mahatma Gandhi is often referred to as a populist leader whose articulation of the nation as an agglomeration of non-hierarchical groups did capture the imagination of erstwhile untouchables, middle-classes, peasants, workers, upper-middle classes and also cut across religious and regional divides. After Independence the Congress forged a history of populism with Indira Gandhi launching her ‘Garibi Hatao’ campaign in 1970-71 in the aftermath of her bid to break free from the “Syndicate” within the party. Mrs. Gandhi attempted to centralize power within her hands; she nationalized banks in 1969 (which also led to a split within the Indian National Congress) for the end result of providing micro-credit to the nation’s agricultural poor living in rural India. Her various piecemeal anti-poverty programs did help a narrow section of the poor and the resonance that the Twenty Point Economic Program had with the electorate, made successive governments extremely wary of getting rid of the agenda completely. Since then quick-fix poverty alleviation programs targeted to briefly ease suffering caused by structural poverty have been a strategy employed by the central government in many states. Several regional parties in India that became increasingly strident in the decade of the 80’s and 90’s have also engineered populist agendas – the DMK, AIADMK, BSP, Telugu Desam, Asom Gana Parishad, Janta Dal, Samajwadi Janta Party, Rashtriya Janta Dal.

In the literature on populism correlations have been made between populist policies and inward looking protectionist economies during early phases of import substitution industrialization. Following the oil shocks of 1973 and 1979, the costs of sustaining such industrialization strategies rose phenomenally plunging many African and Latin American countries into borrowing and debt. The 1980’s came to be known as Latin America’s ‘lost decade’. In Mexico, Brazil and Argentina while populist leaders were credited with delivering on their promises, many also blamed these very policies for plunging the countries deeper into debt after a vicious cycle of hyperinflation leading to low growth and high interest rates culminating in a debt crisis. The implementation of Structural Adjustment Programs across Latin American countries ushered in a new phase of export-led growth and economic internationalization. Yet it seemed that populism never went away and found ways and means to coexist alongside the market. Kurt Weyland found that often times populist leaders and market-reform strategists had common ground. Both were opposed to pre-existing vested interests – business, lobbies and organized labor.

The implementation of the Washington Consensus across several Less Developed Countries (LDC’s) in the late 1980’s and in India in the 1990’s has also resulted in increasing polarization of incomes reflected in larger Ginis in the short-term. Alongside these troubling economic indicators, the growing relevance of populism as an electoral strategy during periods of unconsolidated market-oriented reforms has also been highlighted. Economic reforms are fundamentally destabilizing because they overturn and challenge existing economic and political coalitions that undergird the status quo. As new political and economic actors begin to take center stage, incumbent governments are hard pressed to respond to newer demands of this emergent middle-class and deal with large-scale migration to urban areas as well. Many demands made by an increasingly vocal middle-class are at odds with the demands of those groups that are excluded from market-reform strategies.

There is ample evidence from around the globe to indicate that populism and market-reform policies have often gone together – Carlos Menem in Argentina, Alberto Fujimori in Peru and Fernando Collor in Brazil won elections on populist strategies, as did Boris Yeltsin in Russia and Lech Walesa in Poland. The difference between the Latin American cases and India, however, is that often leaders like Menem and Fujimori tended to announce populist agendas without the support of party structures, when party structures were weak (as indicated by high electoral volatility) and leaders found themselves at odds with party organizations.

While India ostensibly boasts of a middle class last approximated at about 350 million, majority of our citizens still hover in low-income brackets or plainly live below the poverty line. As many have commented, it is also this group that is most likely to show up and vote in an election, clearly seeing the act of voting as perhaps the only right or claim they are allowed to make on the state. The challenge before our political parties is therefore clear. While ostensibly articulating middle-class anxieties about security, infrastructural development and good old fashioned rising GDP, our parties have also introduced populist policies to carry in their chariots or palms those for whom cheaper rice and repayment of agricultural loans are more important than a safe, non-proliferating nuclear program.

Currently in India the two national parties, Congress (I) and the BJP have adopted populist manifestos in a bid to outdo each other. Often the lack of a clear ideology, or an ideology in crisis (like the BJP’s) prompts adoption of populist measures to lend some measure of coherence to an otherwise crumbling political ideal. Such policies are clear, leave no room for negotiation or doubt and have much resonance with an electorate that is exhausted with political rhetoric and intangible results. These policies offer the electorate individual gains – be it cheaper prices of essential commodities. tax breaks or loan waivers. Populist policies have often worked alongside market-reform strategies also because they help dissipate widespread resentment against uncomfortable liberalization measures.

The BJP has had to compete with the Congress this time around since the vastly popular NREGS scheme and Bharat Nirman project of the incumbent UPA government combined with higher Minimum Support Prices for agricultural crops had allowed purchasing power to rise in rural areas, all of which, says Pranab Mukherjee, contributed to the maintenance of 6.5 per cent growth rate as compared to zero growth in countries in Europe, Latin America. Further, the Indian electorate has not shown much patience for Hindutva rhetoric this time around, except as an entertaining sideshow. The predictable rabble-rousing and threatening speeches against the Indian Muslim community by BJP candidates like Varun Gandhi, have generated some controversy, but quick action by an alert Election Commission against such blatant violations of the Model Code of Conduct and the Representation of People’s Act, 1951, have resulted in a structured and measured response both by political parties and the electorate.

Populism is never a good long-term strategy. It drains the state of income and places heavy financial burdens on the state along with severely constraining the government’s ability to mobilize financial resources. This has happened once in 1982 in Andhra Pradesh. The Mid-Day Meal Scheme which was supposed to cover 60 lakh children across the state ended up costing the state 82 crores. Further, once elected the representatives often roll back some of their policies and cannot be held to account. Finally, populism is also better at alleviating symptoms of poverty rather than its entrenched structural nature moored in lop-sided development practices and semi-feudal modes of production in rural areas. In short, populist policies address symptoms, not causes of poverty and inequality.