Almost every opinion poll has predicted that the ruling BJP government is likely to come back to power at the Centre. Be that as it may, opinion pollsters in India can often be unreliable. Even the BJP is not taking this prediction for granted. The multitude of public hoardings and television channels imploring citizens to vote for Modi betrays a deep sense of unease within the party.
The past five years have shed some light on the Modi model of development. However, Rahul Gandhi’s development agenda hasn’t been looked into or understood as much.
Many have dismissed Rahul Gandhi at the outset, due to the mixed record of his predecessors. The Congress’ manifesto appears to be his attempt to start on a clean slate in 2019. Although the manifesto is unlikely to affect voting patterns, it provides a glimpse into an alternative vision for India.
Rahul’s Economic Policies Are Likely To Boost Growth, But May Cause Macroeconomic Instability
The Congress’ flagship economic policies such as the minimum income guarantee and expansion of MGNREGA are likely to bolster rural spending. These initiatives, combined with a reduced regulatory burden and lower taxes for SMEs, are likely to boost economic growth and employment. Indians may feel richer in the short term if Rahul Gandhi wins, but higher government spending will worsen the fiscal deficit.
The Congress manifesto focuses on increasing spending in many sectors, such as the doubling of expenditure on education and healthcare. Although this is socially desirable, increased public spending is unlikely to address the underlying problems in these sectors.
For example, in the education sector, the quality of teaching is proving to be a sticky challenge, requiring innovative policy reform. The Congress’ expansionary growth strategy is a departure from the BJP’s fiscal consolidation path, and may cause macroeconomic instability. However, worrying signs of tepid growth and unemployment suggest that the BJP’s economic strategy is also unsustainable.
Liberal Social Policies, A Sign Of Congress 2.0?
The Congress’ proposal to repeal the draconian sedition law is an important step in protecting the freedom of speech. This British-era law was intended to jail freedom fighters and has been routinely misused by past governments to stifle contrarian views. The law’s repeal is a socially progressive decision, similar to the proposed repeal of Triple Talaq by the BJP government.
Also, by dedicating an entire section of the manifesto to LGBQ+ rights, Rahul Gandhi is demonstrating a socially liberal outlook, uncommon amongst India’s politicians.
Although many doubt Gandhi’s intentions to repeal these laws, even a moderately liberal government would mark a shift from the present administration. In the past five years, the BJP has taken a hardline approach on immigration, trade protectionism and foreign policy. And, Modi’s opposition to the repeal of the sedition law indicates a shrinking space for freedom of expression in the future.
Urban Governance Reforms: The Need Of The Hour
The Congress manifesto proposes urban governance reforms, including the devolution of powers to urban local bodies and the empowerment of mayors. These proposals could be an important step in solving India’s complex urban challenges. Currently, the elected mayor in a city only has a ceremonial role. The municipal commissioner – who holds power – is appointed by state governments, and can’t be held accountable for daily governance problems.
Despite many BJP programmes to improve urban air quality, water supply, and public transport, the inherently flawed governance structure has undermined implementation.
Most cities continue to be beset with traffic congestion, toxic air quality and poor urban planning. The BJP’s smart cities mission programme recognised this by setting up a parallel governance structure to fix the failures of municipal corporations. However, the lack of operational autonomy and limited funding led to many of the smart cities missions becoming ineffective.
‘Rural Bharat’ Will Be More Beneficial than ‘New India’
Critics will point to the manifesto’s NYAY scheme and agricultural loan waivers as a throwback to the United Progressive Alliance’s (UPA) populist policies. Indeed, the loan waivers are a detrimental measure, which could hurt farmers’ credit discipline. They also mainly benefit wealthier farmers, who have access to the formal financial system. However, the NYAY scheme is a policy experiment that must not be dismissed so easily.
Trickle-down economics and social redistributive policies have failed to lift India’s citizens out of poverty fast enough. Sluggish agricultural growth combined with the failure of the ‘Make in India’ initiative has led to few economic opportunities for underprivileged citizens.
NYAY directly provides income security and financial autonomy to them. And combined with the aggressive Digital India campaign pursued by the BJP, the scheme could transform India’s rural economy.
The BJP has implemented many disruptive reforms, such as the Goods and Services Tax, the Insolvency and Bankruptcy Code and Demonetisation. However, arguably, most of these reforms have targeted urban India, unlike the Digital India campaign. The digitisation campaign facilitated a 90 percent expansion in digital subscribers per year from 2014-2017. And combined with the free mobile data provided by Reliance Jio, led to huge internet penetration in the country. NYAY, by increasing rural spending, combined with Digital India, can increase economic productivity in traditional sectors, such as agriculture.
Many believe the best path ahead is for the Indian economy to stay its course – thereby making the choice of helmsman obvious. There are others who argue that the Indian economy and society should make a significant shift from its current path.
As noted policymaker Jake Sullivan says, “Public policy is a study in imperfection. It involves imperfect people, with imperfect information, facing deeply imperfect choices; so it's not surprising that they're getting imperfect results.” His prophetic words can just as easily apply to India’s upcoming election.
(Siddharth Goel is the founder and CEO of Rethinking Public Policy, a South Asia-focused public policy consulting firm. He writes about innovative public policy ideas on Rethinking Public Policy. This is a personal blog, and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)
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