Why freebies at the time of elections?

Image courtesy: Economic Times 

Suddenly it looks as if the sky has opened up. It is raining freebies.

It happens every five years. Six months before the State Assembly elections (and for that matter the General elections) political leaders open the purse. Cutting across party lines, and with the kind of promises they make, it looks as if they are ready to perform the magical trick – to take a rabbit out of the hat for you if they win elections. Not their hat of course, for they have learnt the art of seducing the voters with public money.

How much the promise of Rs 15-lakh in your bank accounts must have swayed the 2014 election result in favour of BJP is for the experts to work out but there is no denying that all kinds of electoral promises that are thrown at voters as allurements obviously do work. Otherwise I see no reason why would politicians try to excel each other in make tall promises before elections knowing well they would not be held accountable once they are voted to power. All you need is to be a little more imaginative when making a promise, to ensure that you are able to tickle the voter’s nerve.

At a time when the youth in Punjab seems to be in a great hurry to settle abroad, I thought the political leadership would be trying their best to check the brain drain by creating economic conditions that meet their aspirations back home. But political parties on the other hand are actually in a race to facilitate their exit. Knowing well that several studies have shown that roughly 1.5-lakh students leave Punjab every year for studies abroad, and find ways to settle there, political parties it seems are not even remotely concerned at stemming this dangerous tide. After all, at this rate, many believe that in the years to come Punjab will be bereft of its enterprising youth, with the brightest of the lot having already migrated abroad.   

Instead, the two major political parties are providing sops that would make it relatively easy for students to migrate. Ahead of the State Assembly polls, Punjab Chief Minister Charanjit Singh Channi has announced interest-free loans to students for going abroad, along with free coaching for IELTS, TOEFL and PTE exams. Earlier in August, president of Shriomani Akali Dal (SAD) and a former Deputy Chief Minister, Sukhbir Singh Badal, had announced an interest-free loan package of Rs 10-lakh for students that would also cover the coaching expenses for IELTS courses that enable students to study abroad.

Given the continuing crisis in farming, and the lack of appropriate employment opportunities, the youth is looking for greener pastures abroad. This is a sad reflection of the failure of successive governments to bring in policies and approaches that could make agriculture a vibrant proposition, that too in a frontline agricultural state, and at the same time provide an effective and functional public health and educational infrastructure. Call it freebies or populism, the fact is that because the government fail to work for the people when they are in power, these kinds of temptations are thrown at them during the electioneering phase.    

In what appears to be a competition of sorts, first the Aam Aadmi Party (APP) promised Rs 1,000 per month for women (not only in Punjab but also in Goa and Uttarakhand) along with 300 units of free power for every household, and this was followed by a promise of doubling this amount to Rs 2,000 per month by the Congress party head, Navjot Singh Sidhu. In a timely editorial: No Freebie lunch, Times of India has also listed other promises including a financial assistance of Rs 5,000 to Rs 20,000 for girl children in Classes 5 to 12, free e-scooter for girl college students in Punjab. For Uttar Pradesh, BJP has promised Rs 1,100 for primary school students for buying school stuff, and Rs 2,000 to 1-lakh girl students. Congress general secretary Priyanka Gandhi has promised smart phones and e-scooty to girl students if voted to power.

The freebies list is quite long.      

In the 2017 State Assembly elections, the former Chief Minister Capt Amarinder Singh for instance had proposed to waive off all outstanding farm loans saying: Karza kurki khatam, Fasal di puri rakam (waiving off of farm debt, outlawing land auctioning and dispassion; and time-bound procurement of grains at MSP). Although only about Rs 4.600-crore of farm debt has been waived off since then, against an estimated Rs 80,000-core plus outstanding, I only wish he had instead of making a half-hearted promise set in a process of rebuilding agriculture. If Punjab had managed to resurrect agriculture, by initiating crop diversification and moving away from intensive farming to agro-ecological farming systems, it would have brought out the government’s intent to help improve agriculture and restore environmental health.

Why only Punjab, I have never understood why State governments are reluctant to set up a commission for farmers income and welfare. Why can’t the State governments make an effort to ensure an economically-viable farm livelihood by taking steps that are within their reach? For instance, why can’t State governments on their own entrust Agriculture Universities and Departments of Agriculture to prepare an Ease of Doing Farming index? Most problems farmers are faced with are linked to governance failure, and this is something the State’s should address. Why wait for directions from the World Bank to start such an exercise.   

This is primarily because when in power the government’s focus invariably shifts to corporate. Whether at the Centre or in the States, economics only means providing sops, tax concessions and stimulus packages to companies. Whenever there is an effort to provide financial assistance and support to the poor including farmers, a dominant section of the media tries to run it down as populism. Popular leaders succumb to media pressure (and also from mainline economists who say the same), and encourage policies that feature on the failed concept of ‘trickle down’. More sops and that includes huge tax cuts for corporate is seen as a sign of economic growth, as it is generally believed to ‘trickle down’ to the poor at a later stage. But it hasn’t. As a study by London School of Economics shows that 50 years of tax cuts for the rich have failed to ‘trickle down’. It has only helped the rich amass wealth.

If only when in power, the political leadership instead of only aiding the companies also makes a sincere effort to uplift the people at the bottom and the middle rung, there would be no need to shower freebies at the time of elections. What some people term as ‘populism’ actually constitutes what real economics should be. If you deprive people of what they really need, you will have to throw allurements at them. This can only be stopped if political masters try to follow what economist E A Schumacher had conveyed through his seminal work Small is beautiful–- treat economics as if people matter. #

Source: Only uplifting people at the bottom can stop politics of freebies in India. Bizz Buzz. Jan 7, 2022. https://www.thehansindia.com/business/only-uplifting-people-at-the-bottom-can-stop-freebies-politics-in-india-723860

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Only a vibrant agriculture can address the employment crisis

In April, the Railway Recruitment Board received over 1.6-crore registration for 35,000 jobs of typists, stenos, account clerks, ticket collectors etc. In Punjab, over 6-lakh students appear for an International English Language Testing System (IELTS), the examination that young students aspiring to migrate abroad must first clear. Such is the crave for leaving abroad that IELTS coaching has become a roaring business, estimated to be over Rs 1,100-crore. With agriculture becoming economically non-viable and with no jobs to look up to, Punjab youth is increasingly keen on leaving the country.

While you are still grappling with the long-term implications of growing unemployment in the country, here comes another shocker. The Bangalore-based Azaim Premji University has in its State of Working India-2019 report said that 50 lakh people lost their jobs between 2016 and 2018. A month earlier, a leaked Periodic Labour Force Survey 2017-18 report of the National Sample Survey Office (NSSO) had shown that 3.2 crore casual labourers in rural areas lost their job between 2011-12 and 2017-18. Of these, roughly 3-crore were the farm workers showing a decline of 40 per cent in jobs availability for farm workers. Some economists have analysed this report and found out that between 2011-12 and 2015-16, manufacturing jobs alone declined from 580.6 lakh to 480.3 lakh, showing a job loss exceeding 1-crore.  

From unskilled to skilled, from uneducated to educated and even to those with high qualification, jobs have been shrinking. In Uttar Pradesh, 3,700 doctorate degree holders, 28,000 post-graduates and 50,000 graduates applied for just 62 jobs of peon. The job basically requires a minimum qualification of class V pass and the ability to ride a bicycle. And this is not the first time highly qualified people have applied for such low jobs. No wonder the Azim Premji University study shows that rising unemployment among the higher educated, the less educated as well as for the informal labour force there has been job losses and reduced work since 2016, the year demonetisation was announced.

At a time when massive unemployment prevails in the urban areas, the number of workers in agriculture too shrunk between 2004-05 and 2011-12. This is being hailed by mainline economists as a brighter side of the job loss nightmare that the country is witnessing. The argument is that the translocation of agricultural workforce to the cities is a sign of economic growth, and it is for the first time that such a clear sign of people moving away from the villages has been seen. Like his predecessor, even the new Chief Economic Advisor Krishnamurthy Subramanian has called for shifting people from agriculture to the cities, which are in need of cheaper labour.

I find this argument regressive. It comes from the same flawed economic thinking that the World Bank/IMF has been promoting all these years. Since Indian economists, and considering most of them occupying higher positions in India have been trained abroad, this flawed thinking has become the unwritten policy design. Way back in 1996, the World Bank had directed India to move out 40-crore people from the rural to the urban areas in the next 20 years, by the end of 2015. More recently the National Skill Development Policy document had made a promise of reducing rural workforce from 57 to 38 per cent by the year 2022. This was based on the premise that urban areas need dehari mazdoor and that can only come from agriculture.

This is a sad reflection on the way economic prescription are borrowed and blindly implemented. In a country where 70 per cent work force still lives in the rural areas, imagine the futility of moving a large percentage of the population to swarm into the cities looking for menial jobs. I have always wondered why can’t Indian economists and policy makers for a change spell out a policy design that aims at making agriculture profitable and thereby revitalise the rural industry. Once there is more money in the hands of rural work force, more demand would be generated, and that would mean the wheels of economic growth will zoom to a much higher trajectory.

While Indian economists failed to emerge out of the World Bank’s blinkered economic thinking, China has taken a leap forward. With nearly 60 per cent of its population forced to move into the cities over the past few decades of rapid industrialisation, China now realises its mistake. With most of the skilled jobs in the cities moving away to Africa where a still cheaper labour force is available for the foreign investors, China has now launched a ‘reverse urbanisation’ programme to take care of the idle or underemployed work force.

According to a report in South China Morning Post, an estimated 70-lakh people, most with higher educational qualification, have moved back to the countryside last year, with 60 per cent reportedly getting back to farming. This also became essential considering the decline in domestic agricultural production as a result of which imports soared. With unemployment and underemployment rising, and with agricultural production dipping, China has taken the right step to what is proverbial known as killing two birds with one stone. Adequate rural infrastructure is being laid out, and a translocation subsidy is also being provided to those who opt for rural areas.

In India, there is no other alternative to creating more jobs than to strengthen agriculture, create more infrastructures in the rural areas, and at the same time provide for more social security in the form of public sector education and health services. With the introduction of PM-Kisan scheme, which initially promise a direct income support of Rs 6,000 per year for farmers, which I am sure will be enhanced in the times to come, the first step of providing an additional income into the hands of farmers has already been taken.

While economists are refusing to change, it’s the political thinking that is beginning to show signs of maturity. First, NDA announced PM-Kisan scheme, and this was followed by Congress with an electoral promise of Nyuntam Aay Yojna (NYAY) promising Rs 6,000 per month to the lowest 20 per cent of the population, a clear pointer to what political leadership sees as a road ahead for economic development that is more inclusive. Both the parties are now beginning to realise what I have said for long: agriculture alone has the potential to reboot the economy.#

कृषि क्षेत्र से ही पैदा होगा रोजगार  Amar Ujala, April 19, 2019

https://www.amarujala.com/columns/opinion/employment-will-arise-only-from-agriculture-sector?src=foryou&fbclid=IwAR2QD-8_OPS8L1E0qeIx2ubXez03zBvKuan9OW4fha7ES2F_CPrGMQj1JDw  

Reboot from farms. Orissa Post. April 18, 2019

http://www.orissapost.com/reboot-from-farms/

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