Friday, 13 February 2015

Delhi Elections: A Rap on the Knuckles for the BJP

The Delhi Assembly elections have thrown up a result that was surely beyond the expectation of even the most optimistic Aam Aadmi Party (AAP) supporter. Likewise, not even the most pessimistic BJP supporter would have expected such annihilation by an upstart party that had shot itself in the foot barely a year back and had come a cropper in the Parliamentary elections of May 2014. Before the event, the battle seemed so stacked against AAP that David versus Goliath might have seemed like a battle among equals! There already are and there will be reams of analyses in the coming days on this battle for Delhi. Let me add my bit here.

I am going to use some elements of the median-voter theorem (MVT) of Public Choice to analyse the Delhi elections. The MVT works best in the context of a two party system where the vote-shares are divided between the two parties. The median voter (located at the half-way mark, point m, in Figure 1 below) has 50% of voters to the left and 50% to the right. If either political party is able to capture the median voter, it will have 50% of the votes plus one more vote (that of the median voter) giving it a simple majority, while the losing party will have just 50% of the votes. The party which captures the median voter just wins the election by one vote.[i] [ii]



In Figure 1, we contextualize the MVT to the contest between the AAP and the Bhartiya Janata Party (BJP), ignoring the other parties for the moment. To capture the median voter’s vote, both AAP and BJP would be expected devise appropriate policies (or make promises, as is the wont of political parties). Figure 1, in addition to the position of the median voter (m), also marks out an area to the left of the vertical line at point a and to the right of the vertical line at point b. The area created to the left of line at a represents the committed voters of AAP while the area to the right of the vertical line at b represents the committed voters of BJP. Committed voters will vote for the party of their choice irrespective of policies proposed or promises made. These are assured or guaranteed votes as far as the parties are concerned. The area between the vertical lines at a and b represents swing voters. Such voters are swayed by policies proposed by the parties: the party that offers more credible policies/promises will attract more of the swing voters. Elections, therefore, are finally decided by swing voters. There is, of course, interplay between the committed voters and swing voters. The larger the number of committed voters that a party has, the less would be its dependence on swing voters.[iii]

We need to, of course, remember that there was an important third party in the fray as well, namely, the Indian National Congress (INC). The vote shares of these three political parties – AAP, BJP and INC – in the 2013 and 2015 elections were as follows (Table 1):


Table 1: Vote Shares in Delhi Elections
PARTY
2013 ELECTIONS[iv]
2015 ELECTIONS[v]
AAP
29.5 (28)
54.3 (67)
BJP
33.1 (31)
32.2 (3)
INC
24.6(8)
9.7(0)
OTHERS
12.8 (3)
3.8 (0)
Note: Numbers in brackets are seats won

For the 2015 elections, it was clear that there were two major players, the AAP and BJP and that the INC and OTHERS would struggle to keep their share of votes intact. The vote shares of the INC and OTHERS from the 2013 elections were, in a sense, thrown into the pool of swing votes. Consequently, a significant part of the combined vote share of INC plus OTHERS from the 2013 elections was up for grabs between the AAP and BJP. As it transpired, INC and OTHERS were able to protect only 13.5% (9.7% + 3.8%) of their 2013 vote share, while almost 24% was captured by AAP. None of this went to the BJP. The vote share of AAP rose to as high as 54.3% which was more than enough to capture the median voter in terms of Figure 1 (please see caveat in endnote ii).

Astounding as the ability of the AAP was in capturing everything that the INC lost, even more shocking was the complete inability of the BJP to attract any of these votes. This was in complete contrast to the BJP’s performance in the 2014 Parliamentary elections. The BJP had then managed to capture the entire reduction in vote share of the INC (28.6% in 2009 down to 19.5% in 2014) at the all India level and had increased its vote share from 18.8% (2009) to 31.3% (2014).[vi] [vii] What went so horribly wrong for the BJP in Delhi? The party that had won so spectacularly in May 2014 as well as in the subsequent state elections had not just been defeated, it had been annihilated. Is it mere disappointment with the BJP that we are seeing among the voters of Delhi or are we seeing anger? This is a legitimate question to ask since the same Delhi voters had given the BJP an overwhelming victory in the Parliamentary elections barely a few months ago. The party had then won all 7 parliamentary constituencies in Delhi and had polled 46.63% of votes.[viii]

The BJP’s winning platform in May 2014 was its secular, development agenda. The vision of a well-governed, corruption-free India that Modi painted had attracted large numbers of swing voters – voters who may have voted for the INC in the 2009 elections. By the time the 2014 elections approached, these swing voters had become disgusted with the scam-tainted INC and its directionless policy-making. In the circumstances, such voters were willing to give Modi a chance. Swing voters, by their very definition, did not subscribe to the religious agenda of the BJP nor were they moved by calls for building the Ram temple. That was the domain of the committed voters who would have voted for the BJP regardless of Modi’s development agenda. The sharply focused campaign that Modi ran was good enough to convince the swing voters that the destructive riots of 2002 were a distant memory and the religious fundamentalists who had instigated these riots would be held in check.

To be fair, during the entire rule of the BJP so far, Modi and his team have remained true to the development agenda that was promised even though there are no concrete achievements to speak of as yet.[ix] However, the support groups of the BJP, notably the RSS, have begun to run a religious campaign that is deeply divisive. I have discussed this at length in an earlier post.[x] The earlier feeling that these acts were the handiwork of fringe groups has given way to the apprehension that the fringe has moved centre-stage. Is it possible to call the RSS a fringe group when every member of the BJP’s top leadership has apprenticed with it and continue to have deep relationship with it? Programmes like ghar-wapasi (reconversion of Muslims or Christians back to Hinduism), provocative statements by elected members of the BJP, riots in parts of Delhi and desecration of churches in Delhi have created unease among the swing electorate who migrated to the BJP in the 2014 Parliamentary elections. This has been coupled with deafening silence from the BJP leadership, notably Modi. It may still be true that Modi has tried to curb such behavior away from the public gaze. But how is the general public supposed to know that? Or, even worse, how is the public to believe that Modi has cracked the whip in private, when the irresponsible Sakshi Maharaj periodically suffers from verbal diarrhea.[xi] It could well be argued that there is no need for Modi to “wash dirty linen in public” but complete silence from a normally twitter-happy Prime Minister must seem jarring.

Significant events, such as riots in Trilokpuri and desecration of churches in different parts of Delhi, did not, as far as I know, elicit a single tweet from the Prime Minister. The minorities might well wonder if their hurt and insecurity is not even worth 140 characters on the PM’s Twitter account. The message going out by these silences was that, either Modi agreed with the religious agenda of the RSS and other yahoos, or he considered it a small price to pay to advance his development agenda, or that he was not strong enough to hold in check these attacks on his autonomy. Was it not exactly this same helplessness that led to the lampooning and finally booting out of Manmohan Singh’s government? The problem then was not a communalizing agenda as now, but acquiescing to corruption that swirled around the then Prime Minister. Was it not also felt that there was a remote control – Sonia and Rahul Gandhi[xii] – that was setting the agenda for the Manmohan Singh government? Remember the various claims made by Sanjaya Baru[xiii] and Natwar Singh?[xiv] How is the current situation, with RSS as the new remote control, any different?

There must have been reasons within the BJP which would have also contributed to the Delhi debacle. The most obvious would be the imposition of Kiran Bedi as the chief ministerial candidate. It is common knowledge that other aspirants to Delhi’s chief ministerial position – Harshvardhan[xv] and Satish Upadhyay[xvi] – were peeved by this development. Perhaps the supporters of these worthies were even more devastated at being denied the opportunity of getting on to the gravy train once their leaders assumed chief ministership. Would these disgruntled elements have actively worked against the BJP and Kiran Bedi? Bedi’s husband certainly seems to think so.[xvii] What seems certain is that enthusiasm of BJP cadres aligned with Bedi’s rivals would definitely have waned. The lackluster campaigning by these cadres would have made it much easier for AAP to capture the votes that were formerly aligned with the INC. The AAP had also cleverly positioned itself as the more reliable alternative to the INC as far as the minorities were concerned. Importantly, the minorities found this positioning credible enough to switch their votes from the INC to AAP and give the party victory in 67 out of the 70 assembly constituencies. As an aside to this stunning victory, I would like to note that I am uncomfortable with such domination by any single party in a parliamentary system. With no worthwhile opposition in sight in the Delhi assembly, there will be no checks on the functioning of the AAP – something that is critical in a democracy.

The results of the Delhi elections are being projected as a referendum on the Modi government at the Centre. I believe that is stretching the message of the Delhi results too far. Of course, the way BJP acolytes are trying to protect their leader from the stigma of defeat is amusing and shows that the more things change, the more they remain the same![xviii] This was exactly how servile INC members had tried to shield Rahul and Sonia Gandhi from the stigma of defeat in election after election. Be that as it may, it is true that Modi and Amit Shah gave far too much importance to these elections – after all what other message is conveyed by the rallies that Modi addressed, by all Cabinet ministers being co-opted for campaigning and by mobilizing more than a 100 MPs for election duty? Modi himself targeted Kejriwal and, very distastefully, called him an anarchist and a Naxalite.[xix] Given the blood on Naxalite hands, this was almost like calling Kejriwal a mass murderer. For a person who was incensed when Sonia Gandhi used the phrase “maut ka saudagar (merchant of death)”[xx] using the Naxalite appellation for Kejriwal was as despicable.

Many analysts are perhaps reading rather too much into the results of Delhi. I do not believe that the message from Delhi suggests that people are tired of Modi’s government at the Centre. The message is more like a rap on the knuckles, a sharp reminder from the electorate that the BJP government needs to begin delivering on its promises; that it needs to remain focused on the secular agenda of economic development and governance; that it needs to shake off the religious vestiges that always seem to cling to the party; and that it needs to hold in check the rabid Hindutva elements as represented by the RSS and other obscurantist groups. The question is whether the BJP government will heed this call and confine itself to the straight and narrow path of development for all Indian without discrimination or will it rush straight back into the welcoming embrace of the religious fundamentalists? The BJP has a little over four years to deliver before it faces the national electorate which may well pick up some lessons from the voters in Delhi.


[i] https://www.cornellcollege.edu/politics/Reading%20-%20The%20Median%20Voter%20Theorem%20and%20its%20Applications%20-%20J.%20Poulette.pdf
[ii] Note that the MVT applies to each election/constituency separately and not for a group of constituencies as, say, in the Delhi assembly.
[iii] Of course, in a multi-party situation, the situation is more complicated. For a party to win the elections, all it needs a plurality – the largest percentage of votes polled which need not cross 50%. Besides this in a first-past-the-post type of elections, as in India, percentage of votes won has only an imperfect relation with number of seats or constituencies won.
[iv] http://eci.nic.in/eci_main/StatisticalReports/AE2013/DelhiAE_2013_stat_report.pdf
[v] http://eci.nic.in/eci/eci.html
[vi] http://eci.nic.in/eci_main/archiveofge2009/Stats/VOLI/12_PerformanceOfNationalParties.pdf
[vii] http://eci.nic.in/eci_main/archiveofge2014/20%20-%20Performance%20of%20National%20Parties.pdf
[viii] http://eci.nic.in/eci_main/archiveofge2014/17%20-%20State%20wise%20seat%20won%20and%20valid%20votes%20polled%20by%20political%20party.pdf
[ix] It is true that inflation has been tamed but that is the success of monetary policy of the RBI initiated way back during the UPA rule. Monetary policy is characterized by notoriously long lags: see Kapur and Behera, 2012 (http://www.rbi.org.in/scripts/PublicationsView.aspx?id=14303). Softening world crude oil prices have also helped lower inflation but, again, the government can take no credit for it. As far as growth is concerned, the picture is not yet clear and it has been made more confusing by the revised data for GDP (http://www.livemint.com/Politics/xziKtmtOxBJntZb41p2hDL/India-GDP-seen-surging-74-in-data-that-has-puzzled-economi.html).
[x] “The Art of Scoring Own Goals”, http://ajitkarnik.blogspot.ae/2015/01/the-art-of-scoring-own-goals.html
[xi] http://www.ndtv.com/india-news/pm-modi-will-have-to-be-a-boatman-warns-bjps-sakshi-maharaj-736673
[xii] http://archive.indianexpress.com/news/rahul-tears-ordinance--and-the-pm/1175119/
[xiii] http://www.ndtv.com/elections-news/narendra-modi-uses-sanjaya-baru-book-to-target-sonia-gandhi-rahul-gandhi-557987
[xiv] http://www.indiatvnews.com/politics/national/natwar-singh-book-no-files-sent-to-sonia-gandhi-manmohan-singh-19218.html
[xv] http://www.ndtv.com/delhi-news/amid-reports-of-rift-harsh-vardhan-kiran-bedi-present-united-front-730032
[xvi] http://zeenews.india.com/news/delhi/dissent-in-bjp-over-parachute-cm-kiran-bedi-widens-satish-upadhyay-heckled_1533498.html
[xvii] http://www.ndtv.com/elections-news/bjp-cadre-failed-to-support-kiran-bedi-says-her-husband-738515
[xviii] http://www.dnaindia.com/india/report-maharashtra-cm-devendra-fadnavis-says-delhi-debacle-not-pm-narendra-modi-s-loss-2060106
[xix] See the following for a very good discussion of these issues: http://www.livemint.com/Opinion/vKiSC1MsJSYEakFVgT9pGN/Modi-Kejriwal-Naxals-and-Vedic-anarchism.html
[xx] http://www.firstpost.com/politics/modi-slams-sonia-gandhi-for-inciting-people-of-gujarat-550665.html

Thursday, 22 January 2015

THE ART OF SCORING OWN GOALS

Two statements of Narendra Modi captured the imagination of the electorate during the 2014 Lok Sabha elections:
  1. Sabka saath, sabka vikaas (roughly translated as “together with all, development for all”)
  2. Na khaunga, na khane doonga (translated as “I will not take bribes nor will I allow anyone to take a bribe”)

The second statement, posed against the backdrop of scams during the UPA rule, attracted voters who were disgusted with widespread and endemic corruption in India. The first statement heralded a new image of the BJP which was always seen as a Hindutva party. The inclusiveness embedded in the statement was meant to transcend religion and attracted to the BJP fold even secular voters who might have otherwise been suspicious of the BJP. Both these statements created a persona of Modi far removed from the politician who delivered aggressive speeches during the Gujarat Gaurav Yatra in 2002.[i] The rest, as they say, is history: Modi, single-handedly, delivered a majority to the BJP. In all fairness to Prime Minister Modi, the two statements that he made were not meant for election purposes only. He and his cabinet have been very responsible so far and there has been no dithering or divergence from the sabka saath, sabka vikas (SSSV) position. If only, this message in the SSSV statement had been imbibed by those who are in the BJP’s saffron corner there would have been hardly any misgivings.

Confined to the BJP, the Na khaunga, na khane doonga statement has stood up to the test of time so far. The future may yet bring stories of malfeasance within the BJP but, for the moment, there is no information in the public domain. The curbs implied by the statement have, however, not covered those from whom the BJP might take support. As I write this, there is news that Finance Minister Arun Jaitley has paid Jayalalitha, former Chief Minister of Tamil Nadu (who was forced to step down by the courts), a courtesy call.[ii] Are we to believe that Jaitley was politely inquiring how Jayalalitha was coping with the loss of chief-ministership? Would he have been as concerned about Jayalalitha’s welfare if she did not have eleven members in the Rajya Sabha? Almost certainly, political equations are being worked out between the BJP and a politician who has been convicted of corruption. The remit of the na khaunga statement does not seem to run to non-BJP politicians whose support may be of help to the BJP.

In the unsavoury episodes in the aftermath of the Maharashtra elections, the na khaunga statement was given an unceremonious burial. Sure, the NCP was quickly off the blocks to offer support to the BJP in the wake of the tiff between the BJP and the Shiv Sena; sure, the NCP and its leaders would have extracted their pound of flesh for supporting the BJP. However, the BJP could well have refused the offer. But the lure of power was too tempting. By playing footsie with the NCP in order to spite the Shiv Sena, the BJP revealed its feet of clay. Of course, the farce of the confidence vote had to be engineered to ensure that the NCP’s support was not officially recorded. The question remains, can one consort with the corrupt and yet remain true to the spirit of the na khaunga statement? Certainly the Maharashtra episode and, probably, the Jayalalitha episode (if an agreement with her comes to pass) implicate the topmost leadership of the BJP, Modi and Amit Shah included, calling into question their announced stand on corruption.

The inclusiveness of the sabka saath, sabka vikas (SSSV) position has been torn to shreds by, not only members of the broader Sangh parivar, but by members of the BJP itself. Here is (possibly a partial) list of the divisive/offensive episodes that have come to light:

  • In the run up to the Lok Sabha elections, Giriraj Singh wanted to send Modi’s critics to Pakistan.[iii] The electorate was informed that Giriraj Singh had attracted the ire of the BJP leadership and was pulled up.[iv] That was then, before the elections. What has happened in more recent times? The Prime Minister has shown his displeasure of Giriraj Singh in a strange way: the “embarrassing” BJP member was inducted into the Cabinet in November 2014.[v] Unless there is something that we are missing here, this must be seen as a reward for Giriraj Singh. The question is, what is the reward for?

  • Sadhavi Niranjan Jyoti, Minister of State for Food, created a furore by her extremely offensive Ramzadon-Haramzadon (children of Lord Ram versus bastards) speech[vi] with the target, of course, being Muslims. Apart from a perfunctory apology, no action has been taken against the Sadhavi: she continues to be minister.
  • Yogi Adityanath’s Love Jihad campaign during the bye-elections in Uttar Pradesh[vii] raised the bogey of Hindu women being lured into marriage with Muslim boys. Was Yogi Adityanath an aberration? Not at all. He was merely articulating a position held by the RSS.[viii] The BJP denied that love jihad was ever its poll strategy.[ix] But, of course, no action was taken against the Yogi who was soon to be in the news in connection with the religious conversion row.
  • Ghar Wapasi or reconverting those who had converted to Islam or Christianity was a further blow to the spirit of Modi’s SSSV position. This was the RSS/VHP programme spearheaded by the indefatigable Yogi Adityanath. The programme began with the reconversion of more than 50 Muslim families in Agra in December 2014[x] and continued, in spite of widespread condemnation, with the reconversion of Christian families in January 2015.[xi] Despite the dare of RSS chief Mohan Bhagwat to non-BJP parties to bring in an anti-conversion bill, I doubt very much if the Sangh parivar will ever support it.[xii] With such an anti-conversion law in place, how will the VHP’s design of homogenising India into a 100% Hindu nation ever take place?[xiii]
  • Lastly, there is BJP member of Parliament Sakshi Maharaj’s call to Hindu women to produce 4 children.[xiv] Not satisfied with 4 children, BJP’s Shyamal Goswani has raised the target to 5 children.[xv] Not to be outdone by mere politicians, a Hindu sadhavi and a seer have set higher targets of ten children.[xvi]

Is it too much to expect that cretins of the religious brigade will ever understand that fertility rates emerge from the uncoordinated decisions taken by millions of women? And that fertility rates are determined by secular factors such as income levels, level of education of (especially) the woman and age at marriage? And that women in India are far too intelligent to be manipulated by so-called protectors of religion? Actually, I do think this is expecting too much from these mindless religious bigots.

The BJP’s response has been to send Sakshi Maharaj a show-cause notice who has, of course, denied receiving any such notice.[xvii] A question that must be asked is whether the call for more children is a call from the fringe or from the core of the Sangh parivar. If responsible newspapers such as the Hindustan Times[xviii] and the Times of India[xix] are to be believed, the call to Hindu women to produce more children comes right from the RSS, the original source from which BJP draws its strength.
  • With Sushama Swaraj, a high ranking Cabinet minister, calling on the government to declare the Bhagwad Gita as a national book,[xx] it appears as if the fringe of the Hindutva brigade has moved centre-stage. For all right-thinking Indians, there is only one national book in India and that is the Indian constitution. As far as I know, no one in the BJP has distanced the government from this call possibly because such a populist move could come in handy some time. For instance, if the going gets tough for the government, accepting Sushama Swaraj’s call would be useful to appease the Hindutva block and keep the BJP’s support bases intact.
  • As I write this blog post, it has become difficult to keep pace with the own-goals being scored by the BJP. The most recent one has been scored by another Cabinet Minister, Nitin Gadkari, who asserted that Modi’s government is made up of Ram Bhakts (devotees of Lord Ram).[xxi] There is no objection at all to Gadkari being a very devout person in the confines of his home. The objection is to giving the government a religious colour. Surely this violates the idea of secular India as enshrined in the Constitution to which Gadkari has sworn his allegiance.

Have these antics and actions of the Hindutva brigade embarrassed Modi and the NDA government? The standard line of various BJP spokespersons, when confronted with the divisive episodes listed above, has been to brush these aside and point to the development agenda of the BJP government. The implication seems to be that if the BJP has been pushing for an inclusive, secular agenda of development, not much attention should be given to comments/actions of the Hindutva brigade. This line of defence would have been credible had the BJP publicly denounced these elements of the Sangh parivar, including the RSS for carrying out communal and divisive activities. In the absence of that, how does one believe that the BJP has an agenda different from the rest of the Sangh parivar?

 The Prime Minister himself has remained completely silent on this, at least in public. (Incidentally, wasn’t Manmohan Singh pilloried for keeping silent far too often?) Has he pulled strings in the background to quell some of the strident elements in the party such as Yogi Adityanath? That is a possibility since there was no reference to love jihad during the campaigning for the Maharashtra elections. Was the BJP genuinely unhappy with Yogi Adityanath’s style of campaigning in Uttar Pradesh or was it just disappointment with the UP results that prompted the change in Maharashtra?

Is there a tussle between the Sangh parivar, which wishes to emphasise social, cultural and religious issues and would like their government to be more pro-active in this regard, and the Modi  government, which seems more focused on secular issues such as governance, growth, inflation and so on? Is this a clash of ideology between forces of modernity on the one hand and antediluvian forces which want to drag India back a few hundred years? Can we be sure that the BJP and the obscurantist Hindutva forces are not two sides of the same coin? Can we be sure that this is not an elaborate good cop-bad cop charade with the fringe elements (bad cop) doing the dirty work that the BJP (good cop) cannot take on board?

Far too many troublesome questions have been raised over the last few months about the exact role that influential elements of the Sangh parivar (notably, the RSS) play in guiding/controlling the BJP government. If such an intrusive role is indeed being played, does Prime Minister Modi have the resolve to stave off such challenges and stay the course to achieve secular goals such as economic development? All those who have pinned their hopes on Modi on the basis of the two statements mentioned at the beginning of this post fervently hope that the Prime Minister is strong enough to rebuff his alma mater.



Tuesday, 25 November 2014

Seeking Parliamentary Cooperation from the Opposition

On the eve of the winter session of the Indian parliament, Prime Minister Narendra Modi  has issued the following statement: “The Winter Session of the Parliament is starting today. In this cool environment, we will do good work in the interest of the nation with a cool temperament, such is my hope. The people of this country have given us the mandate to run the government. But everyone who has been given a place in the Parliament has been given the responsibility to run the nation. And that is why, it is my firm belief that the people sitting in the government and all the people sitting in the Parliament will work together for taking this country forward, and we will have a very fruitful session. In the last session, a lot of good work was done because of the active participation of the opposition. I believe that this time, too, we will have a similar experience” (emphasis added) (See here).
Mr. Modi is a genuine statesman. If only he had been a Member of Parliament since 2004...
While the productivity of the Lok Sabha fluctuated generally over the 100% mark, since 1999-2004 there has been a steady decline, as Figure 1 shows.

(Source: http://www.prsindia.org/media/essential-stats/productivity-of-lok-sabha-over-the-years-3129/)

The Lok Sabha that was just dissolved had the worst productivity in history. All the sessions were beset with disruptions chiefly by the BJP. If only the BJP at that time had received advice from Mr. Modi regarding how to function in parliament even when a party sits in opposition, many important bills might well have become laws by now.
But then Mr. Narendra Modi is a wise leader. If only he had been a Member of Parliament since 2004... 
During the period 2009-14, the BJP stalled proceedings of the house on the following occasions:
  • Illicit land deals of Robert Vadra (See here)
  • Appointment of Lokayukta in Gujarat (See here).
  • CAG report on allocation of coal blocks, demanding that the then Prime Minister, Dr. Manmohan Singh resign (See here).
  • Demand for Mr. P.C. Chidambaram’s resignation (See here).

If Mr. Narendra Modi’s advice were available to the BJP then, he would have told the party to make its displeasure clear but carry out their protests outside the Parliament.
Of course, Mr. Modi is truly well-versed in the etiquettes of Parliament. If only he had been a Member of Parliament since 2004...
In the 1950s, the Indian Parliament was a role model for legislatures of other newly independent countries (Verma and Tripathi, 2013). However, “The 15th Lok Sabha lost approximately 600 hours of parliamentary proceedings due to frequent disruptions”, (Verma and Tripathi, 2013, p. 157). An editorial in the Economic and Political Weekly stated ‘the noise, scuffle and disruption, rather than deliberation and opposition through debate, are gradually becoming the norm in both houses of Parliament” (quoted in Verma and Tripathi, 2013). Clearly, the behaviour in recent times has been contrary to a resolution so solemnly adopted by the Parliament in the fiftieth year of India’s independence:

“We, the Members of Lok Sabha, meeting in a specially convened Golden Jubilee Session of both Houses of Parliament, to commemorate the completion of half a century of freedom... Having remembered with gratitude the great sacrifices made and the salutary service rendered by our freedom fighters... Do now solemnly affirm... That the prestige of Parliament be preserved and enhanced... by
  • Maintaining the inviolability of the Question Hour.
  • Refraining from transgressing into the official areas of the House, or from any shouting of slogans...” (See Parliament of India)

And what has been the actual behaviour of the parliamentarians in the last few years? (McHendry, 2007)
  • Creating a din
  • Rushing to the well of the house
  • Rushing to the podium
  • Sitting on a dharna
  • Display of placards
  • Frequent walkouts and boycotts
The consequence of all such disruptions of the Lok Sabha can be seen in Figure 2. Especially shameful has been the performance of winter sessions of 2010 and 2013. 
(Source: http://www.prsindia.org/media/essential-stats/productivity-of-different-sessions-of-the-15th-lok-sabha-3130/)
We all know that Mr. Modi is a dignified politician and he would never have allowed things to come to such a pass. If only he had been a Member of Parliament since 2004...
The disruptions in Parliament have meant that the actual legislative business of the house has been severely affected. Critical reforms have stalled because the bills could not be taken up. See PRS India for a complete list.
Some of the important bills that the UPA was unable to pass include the following:
  • Raising the FDI cap in insurance to 49%. This is the same proposal that the NDA wishes to bring to the Parliament now but had objected to it when in opposition (See here).
  • Women’s reservation bill
  • The Marriage Laws (Amendment) Bill, 2010
  • The Judicial Standards and Accountability Bill, 2010.

In all, there are about 40 bills pending from the UPA regime which might have to be taken up by the NDA. It’s not clear whether these bills will fit into the vision of the Modi government; if not, these bills will be given a quiet burial. A look at Figure 2 gives clear indication why the UPA has left such a large legacy of pending bills for the NDA.  As Mr. Modi rightly stated (in the quote at the beginning of this note) “...every one who has been given a place in the Parliament has been given the responsibility to run the nation”. Clearly, everyone did not contribute to the governing of the nation during the term of the previous Lok sabha.
But, then, Mr. Narendra Modi, a very responsible politician, was not on the scene during the previous Lok Sabha. If only he had been a Member of Parliament since 2004...

References:
McHenry D.E. (2007) “Parliaments in India: Is there order midst the chaos?”, A paper prepared for presentation at the Western Political Science Association Annual Meeting, Las Vegas, Nevada (http://www.cgu.edu/PDFFiles/SPE/workingpapers/politics/Parliaments%20in%20India%2022507.pdf).
Verma R. and V. Tripathi (2013) “Making Sense of the House: Explaining the Decline of the Indian Parliament amidst Democratization”, Studies in Indian Politics, Vol. 1, No. 2, pp. 153-177 (http://inp.sagepub.com/content/1/2/153)

Wednesday, 5 November 2014

The Political-Economy of Black Money in India

The sparks flying over the Indian political firmament in connection with the disclosure of the names of illegal foreign bank account holders have obscured a crucial aspect of the profoundly important issue of black money in India. This aspect is only peripherally related to the question of who is likely to be included in the list of more than 600 names submitted by the government to the Supreme Court – that question may have some curiosity value but not much else beyond that. Rather, the crucial aspect I refer to is connected with the very dynamics of black money generation in India. Even more importantly, I believe, attention needs to be diverted away from black money stashed abroad to black money stashed within India. I believe this reorientation of attention will take the discourse beyond petty and unseemly party politics. It will also spare us the usual and predictable mud-slinging that various party spokespersons indulge in on Indian news channels.
The recent displeasure expressed by the Supreme Court in connection with the black money issue has been an embarrassment for the government (See Hindustan Times). However, I do believe that the court’s charge that the government was providing a protective umbrella to black money holders was a bit harsh. As of now, I have no reason to doubt the government’s sincerity in pursuing those who have illegal foreign bank accounts. Arun Jaitley’s statements, in an interview with Barkha Dutt on NDTV, had a ring of honesty to it (See NDTV). 
If the government was not interested in providing anyone with a protective umbrella, why was it keen on releasing names of foreign bank account holders in a small trickle? My conjecture is that the government wished to play out the release of these names in the manner of a long drawn out TV serial: it would release a tranche of names every time it needed to embarrass its political opponents. My reasoning for this conjecture comes from the same interview of Jaitley with Barkha Dutt referred to earlier. Jaitley had a smile write large on his face when he said that Congress will be embarrassed when the next set of names of foreign bank account holders is revealed. It was the look of one who has seen the next episode of the TV serial and wishes to titillate the audience by dropping this nugget of information. Alas, the Supreme Court would have none of that: it had been sufficiently incensed with the UPA for its lethargy on the issue and, unfortunately, the NDA had to face the flak. The court was in no mood to wait for the drip-drip of foreign account holders’ names to be released as per a schedule determined by the government. Rather than wait for the slow crawl towards a climax, as is the wont of TV serials, the court wanted the denouement of the black money saga to be revealed in the first episode itself!
One thing is certain from the government’s run-in with the Supreme Court: the BJP has found out that being in government is more difficult than being in opposition. It should have also found out that success does not come with good intentions alone. There is many a slip between the proverbial cup and the lip. The process of bringing back these illegal funds parked abroad is fraught with numerous onerous responsibilities on the part of the Indian government. These responsibilities may be given short shrift only at the cost of incurring the non-cooperation of the countries with which double taxation avoidance treaties have been signed. While in opposition, the BJP could afford to pour ridicule and scorn on the UPA for pointing out the stringent conditions involved when revealing the names of illegal foreign bank account holders. Given the extremely low credibility of the UPA government in the aftermath of the various scams, any mud flung at it was bound to stick. Unfortunately, the boot is now on the other foot.
The Congress and other losing parties of the 2014 elections now have the luxury of hurling criticism at the current government. The NDA government, however, still has its Teflon coating intact: given its clean image, hardly any mud hurled at it tends to stick. Nonetheless, the NDA finds itself in a problem of its own making. No one had compelled the BJP to make the grand promise of getting all black money back to India within a hundred days of assuming office. That promise, unfortunately, has now come back to haunt the party, giving the Congress an opportunity to grab the moral high ground while taunting the BJP with the “we had said the same thing about the binding double taxation treaty clauses” refrain. Anyone who has read the double taxation treaty agreement with Germany (See here) would know that the UPA was right in being circumspect about revealing names in public. The UPA’s position then and the NDA’s position now are identical. 
Should the BJP have raised expectations regarding bringing black money back to India so high? It is quite obvious that such high expectations can rarely be fulfilled. Modesty is a virtue in most walks of life including politics. But, in the last days of the previous government, the BJP’s stock was so high that it felt itself invincible. It had captured the imagination of almost the entire country and the electorate, with fervent hope, hung on to the vision of development that was put forward by the party. With such a commanding position and presence, it did not take long for hubris to take hold of the party. Pride, they say, comes before a fall (or a stumble, as in this case). The Supreme Court admonishment is, of course, not such a great disaster. Hopefully, a lesson will have been learnt by the government and we might, probably, not see such a misstep again.
Reverting to the issue raised at the beginning of this note, studies have shown that possibly far greater amount of black money is lying within the country than has been stashed abroad (See Economic Times). So, why not go after black money that is located in India without being hamstrung by the issue of confidentiality that is involved in the various double-taxation agreements? 
Kapur and Vaishnav point out the importance of black money in Indian politics, especially during elections. Indian political parties are estimated to have spent Rs. 30,500 crore (1 crore = 10 million) during the 2014 general elections (See NDTV). Just prior to the elections, the Election Commission of India had raised the limits on expenditure by a candidate for a parliamentary constituency to a maximum of Rs. 70 lakh (1 lakh = 100,000) with the limit being lower for smaller states (See Business Standard). Given that there were 8251 candidates in the 2014 parliamentary elections (including candidates from unrecognized parties as well as independent candidates) (See Election Commission of India) and assuming all candidates in all states spent the same amount (i.e. Rs. 70 lakh each), the maximum legal expenditure for these elections should have been Rs. 5,776 crore. If the NDTV amount mentioned above is to be believed, actual expenditure was over 5 times the legal amount. More specifically, the Congress with 464 candidates should have spent a legal maximum of Rs. 325 crore and the BJP with its 428 candidates should have spent a legal maximum of Rs. 300 crore. Even the most ardent supporters of these parties will admit that these amounts are laughably low. Is it a surprise then that neither the BJP nor the Congress have submitted details of their elections expenses to the Election Commission of India as of October 2014 (See The Hindu)? Where did these additional funds that were spent by the political parties come from? The major source of these funds is believed to be the real estate sector. Shah and Pandey estimate that real estate sector accounts for 10% of India’s GDP of $ 2 trillion and of this 30% of transactions of all property transactions use black money. Bearing this in mind, Kapur and Vaishnav propose, test and verify a link between the real estate sector (as a generator of black money) and political parties. 
Is there a way out of the black money mess that India finds itself in? There are two ways of doing this. The first is to indulge in the cops and robbers game which both the UPA and the BJP have been playing while trying to uncover illegal foreign bank accounts. The problem with this is that there may not be a neat separation between the cops and the robbers: at least some cops may be helping the robbers or, worse, maybe robbers themselves! However, if the incentives for generating black money remain intact, this cops and robbers game is a mere palliative. At best, it provides excitement to the public, talking points to loud-mouthed TV anchors and fodder to political parties to go after each other. The second and, unfortunately, the more complicated approach is to change the incentive structure for the generation of black money. The economic reforms introduced in 1991 brought about such a major change in this incentive structure. The amelioration of the rigours of the license-raj system and curtailing the discretionary powers of the bureaucracy and the government substantially reduced the avenues for black money generation. However, Gowda and Sreedharan point out that “economic liberalization has not ended the government’s discretionary powers over resource allocation in numerous domains” (See Gowda and Sreedharan). The Government of India White Paper on Black Money identifies sectors which are still susceptible to black money generation. These sectors are real estate, finance, bullion and jewellery, mining and other natural resources and equity trading. Since the government still holds substantial discretionary powers in these sectors, select individuals or groups are able to “buy” favours from government. This ability to buy and sell favours provides powerful incentives for the generation of black money, a large part of which is possibly diverted for financing election campaigns.
The problem at the heart of the black money problem is the nexus between those who receive discretionary favours (private business in the sectors listed above) and those who provide these favours or even those who lobby for these favours on behalf of private interests (the polity in general with a central role for the government). Unless this nexus is broken, there is little chance that the primary cause of black money generation will be nullified. But who will bell the cat? Given the enormous amount of resources that are required to fight elections, can we expect political parties to slay the goose that lays the golden egg? In the absence of a policy which reforms the electoral system (e.g. public funding of elections has been proposed as a solution), we the electorate might as well sit back and enjoy the show-biz of illegal foreign bank accounts being played out on the 24-hour news channels.