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| ‘Money for tickets’ is sad but true | | | Arun Nehru
We are in election mode and in a coalition structure we see a great deal of political churning which can often be classified as "confusion". We have witnessed a near miracle in the US. I wonder if our system and democratic structure can present a similar opportunity to someone with talent and the ability to prevail over caste, community and social prejudice. Change in a democratic society comes with time and is often spurred by events. Few could have predicted a sharp decline in the US credibility after the wasteful war in Iraq based on false reports and the economic mess generated by the sub-prime crisis. The failure of governance and the failure of democratic institutions to exercise control and to maintain the system of checks and balances was apparent in the Iraq war.
There are no miracles in governance but the first important step in any crisis is to restore confidence and calm. I think the election of President Barack Obama offers a very great opportunity for corrective action and we must all think in positives terms as we negotiate the future. The war in Iraq and the changes in the global economic structure will no doubt dominate the global agenda in the short term, but change is in the air as we negotiate the next decade. There will be drastic changes in both the political and economic power structures as we look to the future.
The six Assembly elections in November/December 08 may well indicate trends for the future in terms of coalition structure as well as final political alignments. The Congress is expected to lose Delhi after two terms, and the BJP should in theory, lose the three states of MP, Rajasthan and Chattisgarh because of anti-incumbency. Current trends indicate a BJP victory in Delhi and in Madhya Pradesh (by a reduced margin) and a Congress can win in Rajasthan and Chattisgarh (tough fights). Tough fights, but the BJP seems better organised with a string of effective campaigners led by L.K. Advani, Rajnath Singh, Sushma Swaraj and of course Narendra Modi. Arun Jaitly, in charge of the campaign, is simply the best man for the job.
The Congress will rely on Sonia and Rahul Gandhi. If Gujarat and Karnataka provide any lesson, then there will be less reliance on the "loyal media" and more on sustained political campaigning in all the four states. These four Assembly elections will set the tone for the Lok Sabha polls. The UPA government is under pressure on more than one front. Two wins each will be a draw but a 3-1 ratio in favour of either party will be a clear indicator for the future. Mayawati’s BSP will be closely watched in these four states. If that party picks up seven to ten per cent of the vote, the result can be lethal for the Congress.
The final list of candidates will indicate the extent of change both parties have been able to make on the anti-incumbency factor, and this may well be the difference between victory and defeat. Cutting across party lines, there will be complaints about sale of seats to the highest bidder. The cost incurred in an Assembly elections can be between Rs 50 lakhs-Rs 1 crore. Since rewards of victory can also be huge, it is only natural for allegations of this nature to surface. The irony of the situation for the Congress and the BJP is that even in a losing seat a candidate can make a fair amount of money through the official and unofficial amounts that are generated. Sadly, money plays a very major role in ticket allotment. Allegations are difficult to prove but the exorbitant cost of an election generates a fair amount of financial impropriety at different levels.
The financial crisis is far from over. I am quite amazed at the projection of seven per cent GDP growth for 2009. Despite the massive infusion of liquidity in the US, UK, Europe and China, it would be fair to say that we will find massive demand depression right through the next 12 to 18 months. Therefore, I think, we will be lucky to do even five per cent GDP growth. The government as well as industry have to plan for this down-turn. Steps must be taken now before we face bigger problems in the future. Panic and confusion is very much on the cards. It would be useful if respected industry leaders were to appear on TV, give intensive interviews in the media, and assist those with limited resources to deal with the situation.
We have superb management skills, we have tasted four years of high growth and profitability, and we must now deal with two years of extreme turbulence and low growth. In this period the growth in the US, UK, Europe and Japan may well be negative, but optimistic estimates of growth in an election year have no relevance. There will be a great deal of pain as we suffer low growth in 2009. Estimates will change with every new disaster in the US. Sadly, few if any are aware of the bad debt element in the system.
No country can thrive in isolation in a global society, and the classic example is China which is looking ahead and pumping in 650 billion $ into the system. We need a heavy dose of infrastructure spending ourselves to boost demand. We should have done this yesterday! This crisis is unprecedented and few if any are aware of the direction it can take in the coming months. We literally have to monitor the situation on a weekly basis. |
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