The first reaction of most (including myself) to the Budget presented by the Finance Minister, Mr. Chidambaram, on Feb. 28th was that it was a very sensible Budget, and one fit for the times. However, on reading the fine print (actually boldly stated in the Finance Bill but with only a hint in the Speech) it appeared that there was more to the tax and spend proposals than reform of personal income taxes and feigned? concern about "outcomes".
With Indian cricket dominated more by politicians than batsmen, the cricket team is mercilessly being thrashed by the Australians, and many a kid, and several more adults, are left disgusted. For us purists, maybe baseball represents a cleaner alternative. At least if we lose, it wouldn't feel so bad - we have just started to play the game. And unlike cricket, in baseball you have three outs (strikes) before you are out. Now with that rule applying to us and not the Australians, surely we won't lose. Or will we? (Business Standard, October 30,2004).
We have just witnessed history. By any criteria, the NDA defeat was a stunning upset. No one predicted it, or even came close, not even the dreamers within the Congress party. But that is what defines an upset; to get at a parallel, there are only three elections in the last 55 years that approximate what India has just experienced – Albert Fujimori in Peru in 1990, and Winston Churchill (UK) and Harry Truman (USA) in 1948. Surely, such a verdict calls for an analysis. Herewith, an attempt at identifying the winners, and losers.
Politicians seek mandates and add a spin to the result. If policies are to be based on the “mandate”, then we need to know what the people demanded in Election 2004. This should be useful in drafting guidelines - e.g. the Common Minimum Programme, and later on, actual policies e.g. the Budget.
The human faced Common Minimum Programme, and President Kalam’s speech, are both emphatic in reducing poverty, corruption, and job discrimination in India. These documents read with so much syrup that it is difficult to objectively unglue oneself from the trite but oh! so politically correct messages. If the documents only talked of intention, they could be ignored. But they go much further. For example, the President’s speech outlines legislative plans: “the government is sensitive to the issue of affirmative action including reservations in the private sector and it is committed to faster socio-economic and educational development of the scheduled castes and the scheduled tribes… Reservation quotas in government, including those relating to promotions, will be fulfilled in a time-bound manner. To codify all policies on reservations, appropriate legislation will be enacted.”
If one major forecast is right, then the rule is that you should double up – even if you are slightly wrong on the next, it is worth the risk. Think of what can happen if you are right! In Sept. 1999, I had offered a model of election forecasting that was devoid of any information gleaned from “messy” opinion polls. This model was based exclusively on the pattern of four variables – whether the party was incumbent or not, and the differences in the rates of growth of income (GDP), inflation and exchange rate depreciation. The differences have to do with what happened in the previous election. Based on this model, I had forecast that the much touted ex-post model of anti-incumbency was wrong; that the NDA would easily win the election and that the Congress per se would obtain only 116 seats.
“I am just a poor boy”… and one who has been exploited by politicians, especially the lowly types. And it really does not matter whether the politician is from the Congress, which invented the slogan of removing poverty while enriching the super-rich, or the BJP, which believes that simple aping is the best form of flattery. You have heard it often; I am here to help the poor, I begin in the name of the poor, this program is to help the poor. So much poor around, and they are so stupid, they will buy any jargon, follow any piper’s platitude. That is what the education minister of India, Mr. Murli Manohar (MM) Joshi, believes will happen if fees to students entering prestigious schools like the IIM’s and the IITs (hereafter referred to as IIs) are drastically cut. Since there are no plans to decrease the quality of these schools, and there is an undertaking to the Supreme Court that a vice-like control is not a government objective, the belief is that the government will finance through the general budget (read yours and mine taxes) the deficit caused by the reduced subsidies.
The fundamental issue for governments, and their protégé's, quasi-government organizations(QGO) like the World Bank, IMF and the UN, is one of accountability, or what goes by the QGOs fashionable phrase of "corporate governance". Corporate governance is ensured in the private sector via the market. If a firm is perceived to even have a shade of corporate mis-governance, the highly competitive international marketplace is very quick to penalize it. To ask for corporate governance in today's competitive international world, for publicly listed firms, is like mandating rules that a politician has to campaign - she will do so because it is in her self-interest to do so.
In the article, Kashmir: A Free Way to Peace, (Business Standard, Aug 5), it was suggested that perhaps the only genuine peace possibility rests with India honouring its own 53 years old proposal of a plebiscite in the Vale of Kashmir (both the India and Pakistan controlled areas and excluding Jammu and Ladakh). The suggestion of a referendum raises hackles across the political, national, and religious divide. That it does so is natural, but it does not detract from the necessity of a referendum to end the war, the suffering, the conflict.
This is a dream election for everybody except the candidates Gore and Bush – and especially for election junkies like myself. The US media is having a torrid time forecasting that the election is “too close to call”; everybody is excited, for a change, and who knows, the turnout might actually increase from “only way to go is up” levels of 40 percent or so. Why is the election so close? Because neither candidate comes even close to the brilliance of Clinton. In comparison, they all look alike.
