Time for govt to bury populism

Over the decades, the Indian political class have ignored the core strengths of the country while spending huge amounts on populism. Inclusive opportunities to access quality education, dedicated research to make world-class products, nationalism to erase social divides, an adequate number of people with moral and physical courage to correct the wrong, a common link language to boost domestic trade and cultural exchange still elude the country.

Poverty, unemployment, malnutrition, poor quality of education, bad loans, flight of young talent, the disappearance of water bodies and fertile agricultural land are some of the offshoots of populism.

In post-independent India, political leaders misused the Public Sector Banks (PSBs) for populism; this was one of the reasons for the biggest man-made economic crisis in 1991. In the 80s, the Congress government directed all PSBs to give loans without security to villagers. Massive loans disbursed to industries were never repaid and banks amassed huge bad loans. “The losses incurred as a result of the melas go into still uncounted thousands of crores,” wrote M B Chande in his book "Betrayal of Indian Democracy."

Recently, the Union Finance Minister Nirmala Sitharaman asked the PSBs to hold loan melas or ‘shamiana’ meetings across the country to lend to retail, agriculture and SMEs among others. In the 2019 loan melas, the PSBs reportedly disbursed Rs 4.91 trillion to large and small businesses and farmers. The melas would have further hurt the PSBs, which are struggling to brush off huge bad loans with a series of financial measures such as recapitalization, amalgamation, loan waivers, one-time settlement, formation of bad banks.

Politicians should choose difficult paths to become popular. They can protect fertile agricultural lands and water resources and develop a transparent domestic market; they can ensure quality health, housing and education to the masses at an affordable cost so that people can earn surplus income and save money in banks.

Also read: Policy flaws in fertiliser sector

Quality extension services, a reliable public transportation system, a quick justice delivery system and honest police personnel significantly improve the credit absorption capacity of a region.

Populism always aggravates poverty and unemployment. As governments provide free electricity, cooking gas, ration, household items and subsidized meals to people, it adversely affects the entrepreneurship cycle, repayment ethics and piles up idle energy.

India’s current expenditure on poverty alleviation programmes is approximately Rs 3.4 trillion. The total expenses on poverty alleviation programmes since Independence would be too huge an amount. Had it been utilised on quality education, health care, water conservation and human resources development, India would have been a developed country by now.

People always pay for populism. The cost of basic human needs such as food, fuel, housing, health, education and transport facilities increases manifolds and brings down people’s surplus income keeping them below the poverty line. India ranks low at 97 among 118 developing countries on the Global Hunger Index, which was calculated on the basis of undernourished population, wasted food, stunted children aged under five and high infant mortality rate of this age group.

In many states, Centrist parties often overlook efficiency and choose caste leaders as chief ministers. The demand for reservation from the leaders of forward castes such as Pattidar, Kapus, Marathas and Jats, among others, is rooted in populism. Political leaders from the Southern states openly discourage people from speaking Hindi, which adversely affects domestic trade, cultural exchange, social life and skill development. Populism breeds the worst form of religious fanaticism.

Agriculture in India suffers due to populist measures such as repeated loan waivers creating wilful defaulters; it discourages sincere farmers who repay loans on time. In the past decade, various states have cumulatively waived off Rs 3.14 lakh crore of farm loans. Good governance, reliable transportation, crop diversity, effective end-use of credit, strong domestic market, de-politicisation of co-operative societies and good agricultural practices can redouble farmers’ income.

Many state governments have wantonly allocated fertile agricultural land to educational institutions, IT companies and industries far beyond their actual need, thus helping the real estate business at the cost of agriculture.

It is unfair to say that 50 per cent of workers engaged in agriculture produce less than 15 per cent of India’s output. Give them their fertile land, water bodies, quality inputs and transparent market, and they will produce more. Though 80 per cent of farmers have small landholdings, modern agriculture practices will make them far more productive.

Human resource is worst hit by populism. After 75 years of Independence, India has not made the backward castes feel they are one among the equals. If the weaker sections get compulsory quality education, they could easily compete with the forward castes. The remarkable performance of the Indian tribal athletes in the Olympics shows that caste has nothing to do with talent; what is needed is inclusive opportunity. This is high time to bury populism for the nation’s good.

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