BJP Must Change Strategy
By Dhurjati Mukherjee
Post elections the BJP must have realised thedefinite need to change strategy and focus on the needs and aspirations of the rural populace, including the farming community, as religion-based politics has been rejected by the masses. Prime Minister Narendra Modi’s first decision on assumption of office bears testimony to this fact as the 17th instalment of PM Kisan Nidhi and construction of 3 crore additional rural and urban houses under Pradhan Mantri Awas Yojana, has been released.
With Assembly polls due in Maharashtra, Haryana and Jharkhand between October and December this year, wining these states appears an uphill task for the BJP and its allies. Though it is necessary to take corrective steps to turn the tide, political analysts believe that time is too short and whether the BJP will be comfortably successful remains a big question. In Maharashtra, the BJP and its allies suffered a stunning reverse in the Lok Sabha elections, wining just 17 of the 48 seats. It is understood there was anger from the farming community for failing to address the issue of the ban on onion exports or to offer good prices to soybean and cotton farmers, among other reasons.
Meanwhile, it is only the agriculture sector that can boost the rural demand and recently reports reveal that it has grown at 4.2 per cent (average) in the past five years. There are reasons to believe that the upcoming union budget next month is expected to focus on the rural sector and the youth community, which will provide additional boost to consumption demand. It is anticipated to include measures aimed at increasing rural spending. This could take the form of increased spending on rural infrastructure projects, schemes for minimum support prices for crops, loan waivers or subsidies for agricultural inputs and increased allocation to social welfare programs.
At same time, what has indeed been quite distressing is the recent report of the rise in the Wholesale Price Index (WPI) at an annual rate of 2.6 percent in May, higher than 1.3 percent in April and above the contraction of 3.6 percent in May last year. This has been driven primarily by a surge in food prices, according to data released by the Ministry of Commerce and Industry. Food article prices jumped to a 10-month high of 9.82 percent in May compared with 7.74 percent in April. The rise was fueled by a significant surge in vegetable prices, particularly onions (over 58 percent), and potatoes (around 64 percent). Pulses inflation also remained elevated at 21.95 percent. This means that a significant section of the rural population would be greatly affected.
However, the possibility of a good monsoon season leading to better agricultural yields and higher income for farmers augurs well for the economy. Thus, increased income is expected to boost spending in rural areas. In this connection, one may mention that a positive sign in recent months has been increased rural demand for FMCG products outpacing urban demand for the first time in over two years.
But much depends on what the Budget has in store for the rural sector. More money for health and education may play a crucial role in empowering rural populations. There is also a need to enhance financial inclusion, providing rural communities with better access to financial services. Initiatives supporting research and development in higher education are expected to drive economic growth, enabling rural populations to make informed education decisions, thereby improving their economic prospects.
It needs to be mentioned here that to change its strategy the captain of the team that is, Modi has to change his mode of functioning from an autocratic approach to a decentralised mode. Political analysts are questioning whether a majority less Modi emulate Narasimha Rao, Vajpayee and Manmohan Singh by giving more power and authority to his Cabinet ministers? Besides, in drawing up plans and programmes, there is need to take into confidence the regional leaders of his party and draw up a plan of action that would best serve their interests.
Interestingly, recently aRSS leader speaking openly of that the arrogance led to the election results for the BJP has ruffled feathers within the party. This should be seen as constructive criticism from the mother organisation and efforts must be made to usher in a decentralised system of governance. But the focus of development policy must remain as upgrading conditions of the rural populace, which includes the economically weaker sections as also the lower income groups.
One may refer here to a recent World Bank working paper titled ‘Two Hundred and Fifty Thousand Democracies: A Review of Village Governments in India’ where the need for making available funds to panchayats has rightly been stressed. It is thus imperative to enact necessary legislative changes to strengthen local governments. In this connection, the establishment of the State Finance Commission in every state needs to be ensured to facilitate greater devolution from the state government to the local bodies.
It cannot be denied that the fruits of development in the country have gone to the upper echelons of society, which includes the middle class. In this connection, it may be pertinent to refer to Michael Kalecki, renowned Polish economist, who had analysed that the regimes in the Third World countries were intermediate between capitalism and socialism.
In societies like ours, there has been a switch in the loyalty of this urban intermediate class towards neo-liberalism which, with the opening of the world economy, promised much greener pastures. It cannot be doubted that the neo-liberal regime has immensely expanded the opportunities available to the middle class. Thus, there has been a wide economic gap between this class and the suffering community of Dalits and Muslim minority.
The Modi government has been accused of a pro-upper middle class appeasement strategy over the years and it must be done away with and replacing it for rural poor and farming community. It’s worth referring to Prof. Michael Lipton, a well-known economist from the University of Sussex, who in his famous book titled ‘Why Poor People Stay Poor’ observed that in Third World countries such as India, the rural poor has been subsidising the urban middle class by making available vegetables, fruits at relatively moderate prices. In the process, the urban middle class has benefitted while condition of rural poor has steadily declined.
At such a juncture, there is now no other way but to correct the economic differentiation so that there is more inclusiveness in policy planning and formulation. However, much will depend on the actions taken in the coming days and the Budget that is expected to be presented in the third week of July. — INFA