No stake in nationhood

By Prem Shankar Jha

IT IS to the Vajpayee Government's credit that despite coming under sustained pressure from several of the BJP's allies in the National Democratic Alliance, it has stood firm on its decision to raise the prices of kerosene and cooking gas. But the tug-of- war between the BJP and non-BJP members of the NDA, which preceded it, reveals just how difficult it is going to be for coalition Governments to provide effective governance at the Centre in the coming years. Unfortunately this is the only kind of Government India is going to get. The price hikes finally came after not one but two postponements. The first occurred two weeks before the announcement of the Budget on February 29. The pretext then was that the Telugu Desam, one of the NDA's more important constituents, was facing panchayat elections in Andhra Pradesh. The Chief Minister of Andhra Pradesh, Mr. Chandrababu Naidu, feared that his party's prospects would be adversely affected by a rise in kerosene and LPG prices, and asked the Centre to defer the rise till these elections were over.

An increase in prices was postponed a second time early last week. The Government's excuse this time was that there was no point in increasing prices before the OPEC meeting, which was scheduled for February 29. Since OPEC was expected to increase production in order to bring down the international price of oil (which was then reigning at $30 a barrel) there was no point in raising prices only to have to lower them again a few days later. The Government's logic sounded impeccable till one remembered that it had never intended to eliminate the entire subsidy on cooking gas and kerosene at one go. Newspaper reports had indicated after the first postponement that the Government was planning to eliminate subsidies in three or more stages. Thus had the Government stuck to its original resolve and raised oil product prices in early March, all that the anticipated four dollar a barrel reduction in prices would have done was to reduce the subsidy to be eliminated in the future.

The truth is that the Government was being forced, step by step, to renege on its promise to cut subsidies in order to reduce the fiscal deficit. Whatever Mr. Chandrababu Naidu's parochial concerns may have been, it is hardly coincidental that he is also the ringleader of a concerted move among the allies of the BJP in the NDA, to roll back the cut in foodgrain and fertilizer subsidies that the Finance Minister announced in the Budget. The cuts would together have totalled a measly Rs. 5,000 crores. Compared to the Centre's fiscal deficit of Rs. 1,09,000 crores, and the estimated explicit subsidies of the Centre and States of Rs. 1,50,000 crores, this is peanuts. But even this small fiscal correction was too much for Mr. Naidu to stomach.

In much the same manner, the resistance within the NDA to the Government's attempt to reduce the subsidy on petroleum products, especially on kerosene, has been spearheaded by Ms. Mamata Banerjee, head of the Trinamul Congress. The fact that the Petroleum Ministry had to postpone the increase a second time and only pushed it through when it became clear that the OPEC was indeed going to bring down prices, shows that she too had powerful supporters among the other partners in the NDA.

Why are the BJP's allies opposing cuts in the subsidy? One is tempted to blame the Government for not taking into account the fact that subsidies are not an economic but a political problem, and hammering out a strategy that created as many gainers as losers from the cuts. But in the final analysis, blaming the Central Government is an exercise in self- deception. It amounts to playing ostrich before the most frightening threat to its unity that India has yet faced. This is the fact that the impulse to prevent the reduction of Central subsidies is coming not from populist or ideologically-motivated national parties but from parochial, parties that have strong and stable bases in a single ethno-national State. This is self-evident when one examines how the two postponements of oil price hikes has actually taken place. The resistance to these, and other measures to reduce the fiscal deficit has not come from backwoods politicians like Mr. Laloo Yadav of Bihar but from someone who is arguably the most forward-looking Chief Minister in the country.

Mr. Chandrababu Naidu has been dubbed India's ``cyberminister''. He has already demonstrated his ability to take hard decisions in Andhra Pradesh by repealing the prohibition that was introduced as a populist gimmick by his late father-in-law, N.T. Rama Rao, and by reducing the scope of the rice-for-the-poor scheme to a level that the State Budget can withstand. It is this same man, who did not shrink from reducing subsidies in his home State who has emerged as the chief opponent of cuts in subsidies at the centre.

Had this been an isolated incident one could have ascribed it to some quirk in his personality. But Mr. Naidu's behaviour is filling out a pattern that had already begun to emerge during the United front Government. During the U.F. regime it was not Mr. Mulayam Singh Yadav or even Mr. Laloo Yadav who emerged as the chief opponents of reform but the Left Front. Even while it was running a pragmatic, social democratic Government in West Bengal that was ardently, and successfully wooing foreign direct investment into the state, the Left sent three of its most committed ideologues to man the steering committee of the United Front in Delhi. These gentlemen sabotaged Mr. Chidambaram's first effort to impose austerity on the Central Government by reducing not its Plan but its revenue expenditures, stalled the increase in petroleum prices for a full ten months till the accumulated deficit on the oil account touched Rs. 20,000 crores, and finally sabotaged the effort of the Government to reduce the impact of the pay hikes under the fifth Pay Commission by raising the retirement age of central civil servants by two years.

Nor was the Left the only culprit. Mr. G. K. Moopanar, leader of the forward-looking Tamil Maanila Congress, peremptorily summoned Mr. Chidambaram to Chennai in the middle of talks with the Central Government employees unions and ordered him not to go back till these had been concluded. Mr. Chidambaram complied. As a result, the remaining four members vied with each other in making populist concessions without any check from the Finance Ministry and ended by giving the employees 40 per cent more than the Pay Commission had recommended.

The pattern has persisted into the BJP's second Government. Ms. Mamata Banerjee shares not one but two traits with the Andhra Pradesh Chief Minister. She too is a forward-looking and responsible politician with no dearth of courage, and she too is attempting to strengthen her base in just one State on the basis of an appeal to ethno-national sentiment.

The pattern that is emerging makes it necessary for every concerned Indian to ask himself the following question: if the very leaders who do not shrink from taking hard decisions in pursuit of economic growth in their own home States become the strongest opponents of similar hard decisions at the national level, then what is the future of the Indian Union? The answer is truly grim. India's ethnic sub-States may prosper, but the Indian state will sink deeper and deeper into a crisis. The lack of resources will make it more and more difficult for it to meet essential common needs such as defence, the strengthening of the economic infrastructure, and, the reduction of the gap between rich and poor States through differentiated investment. In short, all the functions that are essential for cementing the unity of the nation will atrophy.

And this leads us to the next question: if India's Centre continues to weaken but the States, or at least some States, continue to grow economically stronger, how long will it be before India starts to break up? Mr. Chandrababu Naidu, Ms. Mamata Banerjee, Mr. G. K. Moopanar, Mr. Om Prakash Chautala and others of their ilk would do well to pause a moment and reflect on the consequences of their actions. They most certainly do not want India to break up. But that is where their attempt to have their cake and eat it too can easily take the country.

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