January 2015 has been a watershed month for the Indian political system. A David has single-handedly slain not one, but two Goliaths. Delhi witnessed scenes of exultation probably last seen after the defeat of the Congress party in the 1977 general elections. As the Chief Minister and his Council of Ministers seek to come to grips with governing a highly complex metropolis, a number of question marks will inevitably raise their heads. These arise after going through the party’s manifesto for the Lok Sabha elections (“the Manifesto”) as well as its 70 point Action Plan for Delhi (“the Action Plan”). Though the former gives pointers to the overarching strategy of the Aam Aadmi Party (AAP) in its search for a national presence, it is the latter that assumes more immediate relevance, since the day has dawned when promises will have to be translated into performance. Without wanting to sound like a modern-day Cassandra, I see three areas where AAP will need to clarify its approach, if it is to meet the aspirations of the people of Delhi and emerge as a viable national alternative by 2019.
The first relates to what may be termed an “anti-institutional” worldview. The AAP was born out of the ferment of the Jan Lokpal agitation of 2011. At that time itself, the effort of the agitators was to virtually stampede the government of the day and Parliament into passing the Jan Lokpal Bill as formulated by them, without debate and without taking other points of view into consideration. It is true that the speed of functioning of all public institutions in independent India is enough to drive any Indian to tears. Still, that does not justify an attempt to push through legislation which, if enacted in its proposed form, could have impinged on the right to liberty of the citizen. The Manifesto and the Action Plan repose their confidence in the very same, unadulterated version of the Jan Lokpal bill, which vests enormous powers in an individual, virtually ushering in a fresh era of the Jacobin Terror with the Lokpal as Robespierre. Not only that, the Manifesto also talks of seizure of assets of corrupt judges. The very foundation of a democracy based on separation of powers would be shaken if the judiciary is sought to be regulated by an outside agency. In fact, the thrust of AAP seems to be on punishment of errant individuals rather than the reform of outdated laws and systems that, coupled with a judicious use of information technology, could vastly circumscribe the scope for corruption.
A second area of concern is the apparent disregard for the principles of sound public finance. The Action Plan promises many concessions and substantial public expenditure on items ranging from concessional power and water to toilets, education, healthcare, housing and social security. The emphasis appears to be on the government as the sole provider, without any involvement of the private or non-profit sectors. Services are sought to be ramped up by increased public employment, without analysing why existing staff (which is considerable) has not been able to deliver, especially in the crucial health and education sectors. There is no mention in the Manifesto of the large, often dysfunctional public sector that bleeds the financial resources of the country and what steps will be taken to make it more efficient. Also, while the poor implementation of social sector schemes has been mentioned in the Manifesto, there is no elaboration on whether these schemes will be redesigned to plug leakages and reach those really in need. The Action Plan also talks of introducing the lowest VAT rates in Delhi. Put all these together and what you are headed for is a huge budget deficit. Delhi may still survive on hand-outs from the central government, but the picture will change for the worse if AAP seeks to run any other state government or, indeed, the central government, on the same financial principles.
The third area of unease relates to the likely impact of AAP’s economic policies on growth. In its Manifesto, AAP talks of placing India on “a sustainable, equitable, globally competitive and high-growth trajectory”. The Action Plan wants a “Delhi that is prosperous, modern and progressive”. But a number of points in the Action Plan are calculated to make private investors wary. It opposes contractualisation of labour and supports permanency of employment in jobs that require round the year employment. While this has been stated in the context of public sector employment, it is quite likely that the same dispensation will extend to employment in the private sector as well. This is going to dampen private investor sentiment; companies need to have the flexibility of ‘hiring and firing’ in a globalised economy (of course, with social security mechanisms and job/skill retraining opportunities). The Action Plan opposes FDI in retail; this is in line with what the party calls “trader-friendly policies”. The problem is that policies which meet trader interests often act against the interests of farmers and organised industry. The repeated references to “crony capitalism” and “encouraging honest businessmen and traders” seem to indicate a mistrust of large-size businesses. Again, one needs to stress that strong institutional mechanisms, including competent regulatory systems and simplified procedures, are crucial to checking corruption. India has an abysmal record in the speed of starting and ease of doing business: one certainly looks forward to the end of the Inspector Raj, enunciated in the Action Plan. Finally, the budget deficits inherent in a populist economic approach and the consequent increased government borrowing will have its adverse impact on private sector access to low-cost capital.
This is not intended to be a critique of AAP’s policies, just a flagging of some concerns that are too often given short shrift by intellectuals and the media in the first heady flush of victory. The AAP has been given a historical mandate. “Aap ki Kasam” can be translated as “on my honour”. To honour its commitment to good governance, AAP needs to adopt a pragmatic and non-confrontational approach to issues, guided by economic realism and political and social realities. It’s progress in national politics will be determined by its success in managing its government in Delhi. To the extent that it is able to do this, it can have voters on a larger platform crooning (in 2019) that popular song from the film Qurbani:
आप जैसा कोई मेरी ज़िन्दगी में आए, तो बात बन जाए…
(If someone like you comes into my life, then my life is made)