The populist rat race begins

The populist rat race begins

The farm loan waiver is already unleashing a cycle of competitive populism.

Mayawati has condemned the Union Budget in a newspaper advertisement that seeks waivers for more groups in society. Sharad Pawar has asked farmers to stop repaying loans to moneylenders. And, as reported in Mint on Monday, other parties could soon be lining up to match the Congress freebies.

This is a feedback cycle with a difference. Populism is usually associated with regional parties. This time, it’s an upward movement to the Centre. But this is likely to go back to the states with a vengeance.

Local parties have long been the vehicles of populism. Their politics consists of little else but handing out doles once in power. The Akali Dal in Punjab, the Indian National Lok Dal (INLD) in Haryana and the Dravida Munnetra Kazhagam in Tamil Nadu are exemplars of this.

Free electricity in Punjab and Haryana is a good example of how stable bad governance is in India. The Congress promised free power to farmers in its election manifesto in 1996. The Akalis implemented it when they formed the government. In the new Akali administration ushered last year, Manpreet Badal, a reform-minded finance minister who understands the damage done by free power, is a beleaguered individual. In Haryana, the INLD lost elections in 2005 after its government tried to recover arrears due to the state electricity utilities.

Worse, it makes politicians learn the wrong lessons. Chandrababu Naidu in Andhra Pradesh is a case in point. After the economic reforms “undid" him in 2004, he ceased all talk of reforms. It would surprise no one if he decides to spend some money and energy in managing politics in a populist vein.

These are not policy issues anymore; they are now the substance of politics. Events in Uttar Pradesh in the last decade show this. Earlier, to win an election, goons and muscle power were the primary requirement. As a result, law and order, the most important public good, was “privatized". When that process was exhausted, electricity, drinking water and now jobs, have been made public goods.

The changing equation between Mayawati and the Centre is a part of that process. State spending on welfare projects is limited by its revenue. But with a coalition at the Centre, the above process is being pushed further: Central revenue itself is up for grabs.

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