India opens the purse for the
poor By Siddharth Srivastava
NEW DELHI - The cost of the project is
estimated at more than US$40 billion per year. The
aim is to provide a human face to India's economic
reforms as well as permanently and politically
establish the Congress Party and its supreme
leader, Sonia Gandhi, in the consciousness of the
majority who really matter - the poor.
The
contours of the anti-poverty scheme are quite
apparent. The project guarantees work for at least
100 days to one member of every rural household in
200 districts, at a rate of US$1.50 per day.
(India's average minimum monthly wage is
approximately $60.) Ninety percent of the
expenditure will be borne by the central
government and the remainder by the states. This
translates into a massive cost and scale, but the
government believes that it can pull it off.
Sonia's Robin Hood act, in
which she will "rob" state coffers to give to the
poor, is not without logic. A quarter of the
county's population of more than a billion still
languishes below the poverty line. At the same
time, India has been steadily growing, with all
the three main sectors - industry, services and
agriculture - doing well. There are pockets of
extremely high profits, such as information
technology (IT)and business process outsourcing.
It thus becomes important that some of the
resources being generated should be transferred to
the poor who have been left out.
This
week, the World Bank announced it would lend India
$9 billion over three years for development
projects in rural areas. World Bank president Paul
Wolfowitz, who is visiting India, said the funds
would be used to sustain the growth needed to
uplift 250 million people out of poverty. "Though
it is making rapid strides, India has an
unfinished agenda," Wolfowitz said.
"Infrastructure constraints are an impediment to
growth."
Earlier this month, the Congress
Party introduced the National Employment Guarantee
bill in parliament, a brainchild of Sonia. She
passionately argued in her speech in parliament
that a country that is expected to grow steadily
at 7% per annum should not have any problems in
tiding over the expenses of the project.
To Sonia's credit, her ideas are at least
better and more mature than those of several
hare-brained politicians in this country who like
to gather votes by inciting communal and caste
differences. An anti-reforms agenda is also of no
help either. The solution is to bridge the two
sections of Indian polity without the bad blood,
which Sonia is attempting.
There is also
every political sense to Sonia's argument. Last
year in May, Congress president Sonia could have
been the prime minister, but she refused, choosing
incumbent Manmohan Singh instead. This one act
catapulted her into the realms of political
infallibility as "renunciation" and "sacrifice"
remain the highest virtues of Indian ethos.
This year, Sonia looks to cement her
position a la her famous mother-in-law and former
premier, Indira Gandhi, establishing herself once
and for all in the hearts of the other 700 million
people of India who still remain outside the
vortex of economic growth and development. One of
the abiding slogans associated with Indira was
garibi hatao (remove poverty). The poor
remain, but the image of the do-gooder provided
Indira an enviable hold over the country that no
other politician could match. Sonia wants to
follow in her footsteps.
India's recent
political history is strewn with leaders, at the
forefront of economic reforms, who have lost in
elections. These include former prime minister
Atal Bihari Vajpayee and former chief ministers of
Karnataka and Andhra Pradesh states, S M Krishna
and Chandrababu Naidu, respectively. Their
successes in engendering growth and changing the
lives of some created resentment among the many
more who could witness tall buildings, flashy cars
and swanky lifestyles, without access to any.
If there is one guaranteed success of
Sonia's project, it will be to uplift the image of
the Congress Party and Sonia among the poor,
cutting across religious and caste calculations
that dominate Indian politics. With elections due
in left bastions Kerala and West Bengal, Sonia has
managed to revive some of the pro-poor image of
Congress that stood Indira in such good stead.
The left parties, who are the key
coalition partners of Congress, have succeeded in
the past year to usurp the role of the voice of
the underprivileged, painting both Congress and
the opposition Bharatiya Janata Party as
neo-liberal, pro-reform parties.
Economic critique It is the
economic arguments that provide the real critique
to Sonia's plans. Such a huge program is very
difficult to implement due to leakages. It has
been well documented that Sonia's attempts at
direct government intervention to remove poverty
have not led to productivity increases that result
in the permanent social mobility of the poor. On
the other hand, it makes them dependent on future
government doles that cannot be sustained.
Although the program seeks to construct village
roads, de-silt tanks, restore wastelands and
forests etc, few economists expect these to
provide long-term benefits.
Further, the
implementation is always tardy and it creates a
huge constituency of corrupt petty bureaucrats and
encourages cadre politics, as happened during
Indira's time. More recent examples include the
failure of similar schemes in the state
Maharashtra, where the implementers have built
minor palaces for themselves in the rural
hinterland. Recently, flood relief money in Bihar
was siphoned off into the coffers of prominent
politicians and senior government officers. This
is apart from blowing a hole in Manmohan's belief
in fiscal discipline.
There have been
reports in the media that Manmohan's beliefs in
prudent economic practice did tread on Sonia's
vision to emerge as a messiah of the poor.
Although the leitmotif of Manmohan's 58th
Independence Day speech on August 15 from the
ramparts of the Red Fort in Delhi was the aam
admi (common man), it is well known that his
approach to dealing with problems is
different.
Manmohan is in favor of creating
an enabling environment in the rural sector
through appropriate infrastructure and business
opportunities that are more sustainable through
implementation of user charges.
Aware of
the dangers of pilferage, Sonia has acknowledged
that the "benefits do not always reach the poor
since the delivery systems claim too large a share
of the outlays". One difference from the earlier
situation is that social activists have been
empowered by the recently enacted Right to
Information Act, which the government hopes will
enable greater public scrutiny of the program.
The act has reportedly been successful at
plugging loopholes in similar projects in
Rajasthan. But it will still be a tough ask to
check funds that are pilfered through common
tricks such as fake muster rolls and thumb
impressions of the supposed beneficiaries.
Indeed, if Sonia does also manage a
modicum of success in the implementation of her
grand plans, with plenty of help from Manmohan,
who is a professional economist, she could yet
step out of the shadow of Indira and become a
statesman rather than just another politician.
Siddharth Srivastava is a New
Delhi-based journalist.
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2005 Asia Times Online Ltd. All rights reserved.
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