The politics of inflation

The politics of inflation
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First Published: Thu, Jul 29 2010. 10 04 PM IST
Updated: Thu, Jul 29 2010. 10 04 PM IST
This week, both houses of Parliament have witnessed repeated adjournments. Opposition parties wanted an adjournment motion for highlighting the issue of inflation, a demand rejected by Lok Sabha speaker Meira Kumar on Wednesday. Disruption of proceedings, and extensive press coverage, followed.
By this account, one could say the politics of inflation is serious business and is something that succeeds very well in India. Think again. If by politics one means concerted public action to force the government into taking new policy steps, failure would be a better word to describe what is happening.
In recent months, whenever opposition parties have launched mass protests, in the form of strikes and shutdowns over inflation, their duration has been, at best, a day or two and the coverage only partial. What explains the anomaly of sustained parliamentary protest and weak to non-existent mass protests?
In contrast to these failures, protests over increases in administered prices of fertilizers and non-increase in minimum support prices of crops such as wheat and rice are usually an unqualified success. It is in this divergence that there are clues why inflation does not yield successful politics. The plain fact is that Indian economy is hostage to a variety of special interests. These are small, powerfully organized sections that can tailor economic policymaking to their benefit. Their small numbers ensure ease of organization and lobbying.
Inflation is a different matter: It involves almost everyone in the country. How does one organize a sustained protest involving a grouping of this size? The answer is that one doesn’t. Or cannot. Earlier this month the Left parties and the Bharatiya Janata Party did organize a nationwide protest. But after one such protest, they moved on. These parties know that such protests can’t be sustained. Parliamentary protests are much easier: The number of protesters is small and the government can be put on the mat for days on end.
The entire process is self-serving and futile. While the government certainly is responsible for high inflation, the political class as a whole is complicit in the failure to curb inflation. The demand-side pressures unleashed by reckless government spending had the approval of all political parties. Any effort to scale back spending is sure to lead to protests by the Opposition. It is hypocritical for the Opposition to agree with the government when it unleashes inflation, but disagree when it comes to the effects of that ruinous spending.
Are Opposition protests on inflation misguided? Tell us at views@livemint.com
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First Published: Thu, Jul 29 2010. 10 04 PM IST