Jul 23, 2013 11:46 PM IST | Source:

Why Tharoor's defence of UPA-nomics is more a self-goal

Tharoor defeats himself right at the outset by summing up Mehta's arguments so well that Mehta himself need not bother to refute much. Tharoor tries to drown Mehta's devastating critique of the UPA with a touch of feigned incredulity, but it does not work.

R Jagannathan

When someone as erudite and suave as Shashi Tharoor takes up cudgels on behalf of the UPA, one expects not only a spirited defence, but also a strongly argued case. Unfortunately, the Union minister of state for HRD has, in an Indian Express article today, only managed to soil his own reputation. Not only is he completely unconvincing, he has also been unable to move beyond standard party line.

Tharoor's article was important because intellectual opinion has been moving decisively against the UPA's stewardship of the political economy of India. In the last few weeks, the Express featured both Pratap Bhanu Mehta and its own Editor-in-Chief Shekhar Gupta, both of whom expressed despair at UPA's economic and political failures. (Read their articles here and here).

While Mehta is a neutral intellectual, Gupta, if anything, has been positively disposed to the UPA, in general, if not its "welfarist" policies. Tharoor's article is meant primarily to counter both of them, but he falls flat on his face because what he said was contrary to easily observable realities.

Tharoor defeats himself right at the outset by summing up Mehta's arguments so well that Mehta himself need not bother to refute much. Tharoor tries to drown Mehta’s devastating critique of the UPA with a touch of feigned incredulity, but it does not work. Tharoor writes: "Mehta would have us believe that nine years of UPA rule have decimated the country's roads, airlines, telecom and power sectors, undermined education and employment, destroyed agriculture and industry, wrecked institutions, ruined financial stability and spurred inflation and burdened the country with regulation."

For good effect and some degree of misplaced sarcasm, Tharoor adds: "In a spasm of extravagant phrase-making, he (Pratap Bhanu Mehta) also sees the government as threatening virtue, freedom and the citizenry, no less. To this over-the-top indictment, Gupta adds his own: the UPA's 'welfarism' has betrayed the promise of reform and created a doctrine of 'povertarianism', which condemns Indians to perpetual poverty."

Far from indicting Mehta or Gupta, this sum-up is so succinct and realistic that few can believe Tharoor's counter-points.

Let's start with his attempt to rebut Mehta. Who can deny that road-building has crashed under UPA despite faster growth? (Read here). Who can pretend that the airline industry is not a mess (Kingfisher gone, rest bleeding and Air India on perpetual life support)? And let’s not forget, there's now a dubious effort to rescue Jet by giving Etihad a sweet deal on market share.

Telecom? Has Tharoor forgotten 2G, flopped auctions, everything? Power? We have a sector bleeding from every pore, with humongous losses racked up. (Read here about what Manmohan Singh’s pal Montek Singh Ahluwalia thinks of a sector with Rs 2.5 lakh crore of accumulated losses). Education? Despite pouring thousands of crores, learning outcomes are poor. (Read this telling indictment of what the Right to Education has actually achieved).

Employment? A disaster. During UPA-1, despite frenetic growth, just over two million jobs were created against over 60 million during NDA rule. Even the latest NSSO survey, which showed 13 million jobs created between 2009 and 2012, seems to have achieved this only through a statistical fudge. According to a report in Business Standard, the employment data is inflated by at least 30 percent through the simple ruse of using 2001 population figures to judge employment in 2011-12.

The one sector that the UPA did not destroy was agriculture, but this sector has been propped up by mindless subsidies (fertiliser, food and oil). Agriculture's success is the result of a huge transfer of resources from the taxpayers and the exchequer to the farmer through high minimum support prices and the creation of grain mountains that don’t reach the poor. The agricultural success is thus built on sand.

As for industry, the less said the better. Over the last two years, businesses have simply refused to invest and industrial production has crashed on the rocks of policy paralysis and general economic pessimism. Companies are sitting on cash and refusing to invest.

Financial instability? If India were stable, the rupee would not be at 60 to the dollar, and a panicky Reserve Bank would not be stamping on gold imports and squeezing liquidity to curb speculation. India's current account deficit and foreign debt situation has never been worse. Most experts are now uneasily comparing 2013 with 1991, and wondering if we are getting into the same hole. As for inflation, consumer inflation has never lost sight of double-digits for most of UPA-2, and this could well continue.

Tharoor has only to click on all these links I've provided to re-educate himself on how badly the UPA has fared on all fronts except poverty reduction, which we will discuss later. But for now, let's analyse other parts of his weak defence of the UPA.

For example, he opts for the tired and trusted line that India's slowdown still leaves it ahead of the world. Okay, fine. But when the world is going down, was that an opportunity missed for India to shine or something to accept fatally?

But Tharoor says, obviously without irony, "Prime Minister Manmohan Singh‘s stewardship has a lot to do with this."

This should be news to everybody in India, that we are the second-fastest growing economy in the world even in this slowdown because of Manmohan Singh’s efforts. Tharoor goes on: "His (Singh’s) is the voice heard with greatest respect when the G-20 gathers to discuss the world's macro-economic situation. President Obama has mentioned him first among the top three world leaders he admires."

One would have thought that Manmohan Singh should be seeking the respect of Indians and not Obama. Why would Obama ever say anything negative about India or Singh, even if we screw up our economy?

Equally doubtful is Tharoor's criticism of Shekhar Gupta's charge that Congress is promoting "povertarianism." Anyone who has even a nodding acquaintance with Sonia Gandhi's jholawalas in the National Advisory Council (NAC) should have no doubt on this score, but Tharoor uses the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGA) to counter Gupta.

He writes: "What about the UPA's alleged "povertarianism"? Every fifth rural household in India benefits from the Mahatma Gandhi National Rural Employment Guarantee scheme, which provides employment mostly to the Scheduled Castes, Scheduled Tribes and women in villages (in my own state, Kerala, 92 percent of the beneficiaries are women, whose lives have been transformed by their MGNREGA income)."

Is that so? The very fact that UPA created fewer jobs in the real economy and then tried to use MNREGA to make up for the difference suggests that UPA prefers to create work by fiat rather than allow real growth to create real jobs. The fact that 92 percent of MNREGA's beneficiaries are women in Kerala is a telling indictment of female disempowerment in his state. Why are women forced to go to MNREGA in India’s most literate state? Is this something UPA should be taking credit for? (Read here, here and here on this).

Tharoor is most believeable when he talks about UPA reducing poverty, and least believeable when he castigates Mehta and Gupta for failing "to notice that today's India boasts a thriving, entrepreneurial and globalised economy, with a dynamic and creative business culture, engaging with the world on its own terms and pulling over 10 million people a year above the poverty line."

Barring the last line about poverty, everyone can be forgiven for "failing to notice" these facts. Where is the "thriving, entrepreneurial" part of India visible in the country right now? As for poverty, it has certainly fallen, and fallen dramatically under UPA, now down to 22 percent from 37.2 percent in 2004-05.

However, final judgment should wait for some more time. We don't know how much of this reduction came from fast growth, which wasn't a UPA creation, and how much from doles and social spending, which are unsustainable.

But even assuming we take poverty reduction as UPA’s crowning achievement, Tharoor's defence of UPA-nomics is simply not tenable. It largely flies in the face of facts.

The writer is editor-in-chief, digital and publishing, Network18 Group

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