Having your cake and eating it too is a great idea. Unfortunately it only works when the one baking the cake is someone else, and more importantly does it for free.
I have never had any soft corner for the UPA government, and I never had any liking for the BJP either. I am as indifferent to the political parties in our country, simply because they all promise just one thing: They will act in their own selfish interests, barring in some very special circumstances. I still don’t want BJP to come back in power, not until they figure out a vision of India that is even remotely constructive in nature. The unfortunate reality is that they are quite likely to win the next general elections. They are not going to win the next elections because the perennial PM in the making Mr. Advani has suddenly developed the charisma he never had. They aren’t going to win it because Modi is a mass leader. They will win the election because their opponents will lose it.
Seven years ago, in February 2006, some wise folks in Congress decided to implement NREGA. It was thought to be a political master stroke, as it won them the next general elections. Surely nothing could go wrong, all they had to do it was expand it and they were sitting on a potential political goldmine. They just forgot one thing: doling out a freebie is like riding a tiger, there are no acceptable exit options available.
If any of the ministers in the government had cared to read Milton Friedman, they would have known that the results of this largesse would start to impact the economy 2 years down the line. Not much happened, except that the inflation rate increased by 2 percent. Two years of billions of dollars of wages for economically unproductive work financed by printing money can only lead to devaluation of money i.e. inflation. It might not have impacted those who received the benefits under NREGA (in a corruption free scenario, but whom am I kidding here), but it did start to hurt those who didn’t receive any benefits under NREGA. Was one year enough for the inflation to pinch enough of Indian citizens? I am not sure. The government did not have much of a choice rather than to increase the coverage of the scheme. All the government could hope was that the inflation would come down by a miracle or by actions from the central bank. Neither scenario materialized but what did materialize was the hardship faced by the common citizens.
As always there are 3 types of people impacted by this scenario:
1. Those who benefit from NREGA, and are hit by inflation: In theory these people should be better off, at least if the levels of corruption in the implementation are low. Having said that, most of the people in this category are likely to have been receiving these benefits for many years now. They are used to it. There aren’t many ‘for’ votes for someone who continues this scheme, but there are many “against” votes for someone if they discontinue this scheme. In any case, even they would like to get the benefit and prefer the inflation rate to be moderate. Bottom line is this: Are they going to be grateful to the government for this benefit and vote for them or are they going to vote on caste/religious/other factors? No one knows, but it’s a fair guess to say that this constituency is split.
2. Those who don’t benefit from NREGA, and are not hit by inflation: This category includes folks like me. Inflation is a problem, but it doesn’t bother me too much. Once again, I believe this category is split and would vote on the basis of caste/religious/other factors.
3. Those who don’t benefit from NREGA, and are hit by inflation: This is the constituency that will be the one that costs the government this election. It’s a sizeable constituency that comprises of urban poor, and rural poor whose villages haven’t been covered by NREGA as yet. They have not received the benefits of NREGA, but they have paid all the costs of inflation. It’s anybody’s guess as to how they will vote. One thing we can know for sure is that they are not likely to vote for the government. No wonder then that the government is trying to target them by bringing the Food Security Bill. Of course the opposition is trying to block it as they know the impact of the bill as well.
Long story short, this government is going to lose and lose big. Even though I have made this prediction, I am hoping that I am wrong. I would prefer five years of peace with record breaking corruption to five years of ‘rath yatras’ and other assorted nonsense.
I have never had any soft corner for the UPA government, and I never had any liking for the BJP either. I am as indifferent to the political parties in our country, simply because they all promise just one thing: They will act in their own selfish interests, barring in some very special circumstances. I still don’t want BJP to come back in power, not until they figure out a vision of India that is even remotely constructive in nature. The unfortunate reality is that they are quite likely to win the next general elections. They are not going to win the next elections because the perennial PM in the making Mr. Advani has suddenly developed the charisma he never had. They aren’t going to win it because Modi is a mass leader. They will win the election because their opponents will lose it.
Seven years ago, in February 2006, some wise folks in Congress decided to implement NREGA. It was thought to be a political master stroke, as it won them the next general elections. Surely nothing could go wrong, all they had to do it was expand it and they were sitting on a potential political goldmine. They just forgot one thing: doling out a freebie is like riding a tiger, there are no acceptable exit options available.
If any of the ministers in the government had cared to read Milton Friedman, they would have known that the results of this largesse would start to impact the economy 2 years down the line. Not much happened, except that the inflation rate increased by 2 percent. Two years of billions of dollars of wages for economically unproductive work financed by printing money can only lead to devaluation of money i.e. inflation. It might not have impacted those who received the benefits under NREGA (in a corruption free scenario, but whom am I kidding here), but it did start to hurt those who didn’t receive any benefits under NREGA. Was one year enough for the inflation to pinch enough of Indian citizens? I am not sure. The government did not have much of a choice rather than to increase the coverage of the scheme. All the government could hope was that the inflation would come down by a miracle or by actions from the central bank. Neither scenario materialized but what did materialize was the hardship faced by the common citizens.
As always there are 3 types of people impacted by this scenario:
1. Those who benefit from NREGA, and are hit by inflation: In theory these people should be better off, at least if the levels of corruption in the implementation are low. Having said that, most of the people in this category are likely to have been receiving these benefits for many years now. They are used to it. There aren’t many ‘for’ votes for someone who continues this scheme, but there are many “against” votes for someone if they discontinue this scheme. In any case, even they would like to get the benefit and prefer the inflation rate to be moderate. Bottom line is this: Are they going to be grateful to the government for this benefit and vote for them or are they going to vote on caste/religious/other factors? No one knows, but it’s a fair guess to say that this constituency is split.
2. Those who don’t benefit from NREGA, and are not hit by inflation: This category includes folks like me. Inflation is a problem, but it doesn’t bother me too much. Once again, I believe this category is split and would vote on the basis of caste/religious/other factors.
3. Those who don’t benefit from NREGA, and are hit by inflation: This is the constituency that will be the one that costs the government this election. It’s a sizeable constituency that comprises of urban poor, and rural poor whose villages haven’t been covered by NREGA as yet. They have not received the benefits of NREGA, but they have paid all the costs of inflation. It’s anybody’s guess as to how they will vote. One thing we can know for sure is that they are not likely to vote for the government. No wonder then that the government is trying to target them by bringing the Food Security Bill. Of course the opposition is trying to block it as they know the impact of the bill as well.
Long story short, this government is going to lose and lose big. Even though I have made this prediction, I am hoping that I am wrong. I would prefer five years of peace with record breaking corruption to five years of ‘rath yatras’ and other assorted nonsense.
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