Coalesce or bust
The fevered speculation about who will form the next government has almost completely obscured the question that people should be asking themselves: what will an indeterminate result do to the quality of governance? The answer is anything but reassuring.
To surmise what is likely to happen, let us trace the government-making process that will follow the announcement of the results. Even if the NDA does not get an absolute majority, there is not much doubt that the BJP will emerge as the largest single party, and the NDA as the largest single pre-election coalition in the country.
On both counts, therefore, the president will be obliged to ask Vajpayee to form the government. The thought should be reassuring to all those who want the continuation of existing policies. But a moment’s reflection will show that even continuity will not be all that easy to maintain. The reason being that in order to form the government, Vajpayee will be forced to seek the help of at least one, and quite possibly two or more small parties.
To enlist them he will have to offer them either a disproportionate number of, or disproportionately important, portfolios. This can be done either by reducing the number of portfolios held by the BJP or depriving some of the existing members of the NDA of their existing portfolios, or both.
The end product will be ruffled feathers all around, and a distinct loosening of bonds, within the BJP and within the alliance. The former will weaken Vajpayee and Advani within the BJP. The latter will make some of the alliance partners feel disgruntled. This will revive the tendency, last seen in 1998, of each party looking out for itself and not hesitating to criticise, in public, policies that impose obligations or sacrifices upon their voters.
The ruling alliance will be further weakened by the populist nature of the parties that Vajpayee will now be forced to woo. The least damage would be done if the DMK were to return to the alliance or give it support from the outside. But after the callous way in which the BJP switched horses in Tamil Nadu, this may not prove easy. By the widest of definitions, the candidates for induction are Mulayam Singh’s SP, Mayawati’s BSP, Sharad Pawar’s NCP and, as an outside possibility, Laloo Yadav’s RJD.
With the partial exception of the SP, all have so far shown a singular lack of interest in governance and an unhealthy interest in the loaves and fishes of office. All of them also have a disproportionately high number of candidates with criminal pasts. On both counts, therefore, their stand on most issues is likely to be unabashedly populist. Add all this together, and even the capacity to continue the present deliberate pace of economic reform, for instance, will be greatly impaired.
The situation is not likely to be any better if the BJP fails to form a government, and the Congress has to take on the job. The Congress has seasoned leaders and no dearth of responsible politicians. But to form a government it will have to induct not only the Left Front, but many more of the small, populist parties of northern India than the BJP would have to.
This motley coalition will come to power without having worked together before, without having had a single policy discussion, and without even having made significant seat adjustments before the election. As past experience has shown, framing a common minimum programme will not be difficult, for any of them would promise the moon to come to power. It is the implementation that will prove next to impossible. Paralysis would be complete if the Left decided, as it had done in 1996-98, to lend support from the outside, without accepting the responsibilities of office.
The loss of cohesion within the ruling coalition will scuttle a host of reforms that are now in the works. For instance, it is difficult to see how the new government will be able to enact the Contract Labour Bill, or amend the Industrial Disputes Act to permit even limited hiring and firing. Other long-deferred reforms will also get ‘postponed’, such as the de-reservation of more than 670 products now reserved for the small-scale sector. Privatisation will receive a serious setback, because trade unions oppose it, and all the caste-based parties regard job reservation in the public sector as an inalienable entitlement and a road to empowerment.
But the worst casualties will be the finances of the central and state governments. Today, the consolidated fiscal deficit is running at over 10 per cent of the GDP. This relentless borrowing by the State is keeping interest rates high by international standards and pulling in a flood of dollars that are driving up the exchange rate. Any further appreciation of the rupee will hurt exports, and increase the balance of payments deficit. If the external deficit is allowed to mount unchecked, it will, inevitably, lead to a flight of the money that has been coming into the country and provoke an economic crisis.
The high fiscal deficit has also cut into both public and private investment. The former has caused an already appalling infrastructure to deteriorate further. For all these reasons, time has run out for dealing with this problem. The next government will have to tackle it on a war footing. This will mean it will have to cut back subsidies, which make up the bulk of the deficit, very sharply. When even the old NDA could not do this, it is difficult to see how a new, weaker NDA or a heterogeneous Congress-led alliance, will do so.
The damage will not be confined to the economy. If the NDA wins fewer than 250 seats, and especially if the BJP itself loses more than a few seats, Hindutva hawks within the party will rush to put the blame on Vajpayee’s policy of dropping contentious issues from the party’s agenda and concentrating on its economic performance alone. The BJP could, therefore, lurch to the right, and the shift will become more pronounced if it is unable to form a government and has to yield to the Congress. This will not help the cause of social harmony and economic development.
The Indian political system, therefore, faces a serious challenge. No matter which coalition of parties comes to power, its first task will be to resist the blackmail of smaller parties, whether in the distribution of portfolios or the choice of policies. Both the Indian economy and the polity are too fragile to face another five years of drift.
For the BJP or the Congress, as the major parties, the best policy will be to push through an agenda of political, judicial, administrative and economic reform in the first months in office, when the reluctance to break the coalition is greatest, and allow the resulting benefits to cement the alliance over time. If doing the right thing breaks the coalition, it is better to let it break and go back to the electorate for a fresh mandate.