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Why UPA-2 has failed: Voodoo politics and economics

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R Jagannathan

How did UPA-2 pull disillusionment (and potential defeat) from the jaws of thumping victory in 2009? What went wrong? Why didn’t anything go right? And why do we think that UPA-1 did better than UPA-2?

As the media gets ready to evaluate UPA-2’s performance on the third anniversary of its return to power today (21 May), we shall seek to answer these questions.

At the risk of oversimplifying the analysis, I would say UPA-2 failed by following voodoo politics and voodoo economics, based on voodoo belief that politics and economics can be permanently divorced.The term voodoo economics was coined by George Bush Sr to attack Ronald Reagan’s economic policies that prescribed tax cuts as the best solution to the country’s problems. In India, of course, voodoo economics is the reverse – it stems from the opposite belief that you can go on spending and taxes will somehow come back to the coffers and rescue the economy.

But what we now have is falling growth, falling rupee, falling UPA credibility, rising inflation, rising government expenditure, and a rising sense of unease about where India is heading.

For UPA, it all began with voodoo politics – politics without internal consistency, vision or governance. To understand this, we need to go back to 2009, when the Congress party was celebrating its huge victory. The party increased its Lok Sabha seat-count to 206 – the highest tally by a national party since 1991 – barely 65-70 seats short of an absolute majority on its own. That’s where voodoo politics began in right earnest.

The 2009 results confirmed two things to the Congress party: that heavy social spending is the way to install Rahul Gandhi in power in 2014; and that the country may soon be ready to give one party complete control of government.
What started as a brief dalliance with aam aadmi politics in 2004 (which the Congress unexpectedly won) gathered more steam after 2009.

What remained unchanged after UPA-1 was the belief that the Sonia-Manmohan division of power – where the former influences all major political-economic decisions and the latter keeps a semblance of administration going without doing much – was good enough to ensure a Rahul Gandhi victory in 2014.

In short, far from seeing 2009 as a mandate to govern, Sonia Gandhi and Rahul saw 2009 as an incentive to start planning for 2014. Stated differently, the political efforts for winning 2014 began as early as 2009. This was how UPA-2 squandered its mandate.

We all know how policy-making turns populist whenever parties see elections round the corner, but Sonia and Rahul smelt it five before 2014.
This is why the National Advisory Council (NAC), which had been disbanded in 2006 after the office-of-profit controversy, was revived in March 2010 to devise pork-barrel entitlement schemes that would pay off politically in 2014.

Whether it was the land acquisition bill or the mining bill or the food security bill, the NAC was reactivated to give Sonia the political platform to start planning for 2014 from 2009 itself.



This was also why Rahul Gandhi kept playing compulsive populist at regular intervals – turning up suddenly among Orissa’s tribals to claim he was their soldier in Delhi in August 2010, announcing a Muslim quota before the UP elections.

Lessons from the Bihar elections, where the party was trounced by Nitish Kumar and the BJP in 2010, were ignored as aberrations.

The Congress also underestimated the impact of the Left’s bullying in UPA-1 in keeping its own coherence intact. When the Left was seen as the frenemy (a friend and enemy), it gave both Sonia and Manmohan an incentive to back each other up. It also kept the ambitions of the top three in the UPA government – Manmohan Singh, Pranab Mukherjee, and P Chidambaram – in check.

In UPA-2, both the things that ensured cohesion in UPA-1 disappeared. Sonia and Manmohan seemed to be on different planets, and the Big Three were busy trying to undercut one another on the assumption that the top job may be up for grabs as Manmohan Singh seemed to falter.

To make matters worse, the BJP continued to remain in self-destruct mode, with no leader, no policy ideas, and no plan to capture power in 2014. It is this vacuum created by the BJP that enabled the regional parties to fill the opposition space – accentuating the voodoo-politics syndrome.

The BJP’s failure has facilitated the emergence of voodoo politics, where governance has been given the go-by on the assumption that the First Family’s magic and heavy social spending are enough to give the party a win.

This is why when corruption emerged as a major concern among the urban middle-classes – the classes that put the Congress on top in 2009 - the Congress tried to brazen it out with the Baba Ramdev and Anna Hazare movements. Luckily for the Congress, both Anna and Baba embraced voodoo ideas like the Jan Lokpal Bill and bringing back black money as some kind of panacea for corruption. Both scored self-goals and became less of a threat to the Congress.

At the core of voodoo politics is the First Family’s reluctance to play a political role in UPA-2, with both Sonia and Rahul surfacing in public only when it suited them. Leaving politics to sycophants and trusted retainers like Ahmed Patel or Digvijaya Singh meant that neither Sonia nor Rahul engaged with politics directly – except at election time.

Voodoo politics in UPA-2 was aided by voodoo economics – where no reforms are ever deemed needed. This was partly the result of UPA-1’s undeserved economic success. Thanks to a successful first term where the economy averaged over 8 percent growth, the Congress developed a naïve belief that everything will fall into place due to our demographic advantage or social spending. One merely has to keep redistributing income (to the poor, the rural areas) and things will work out fine.

At the end of UPA-1, the Congress party wrongly assumed that the buoyant economy was the result of its own policies rather than dumb luck. But this is what really happened.


The economic uptick, which came after years of small reforms carried out during the United Front and NDA years, and which was aided by very high global growth during the George W Bush years, started in the last year of the NDA and continued till 2007-08 – five solid years.

If the initial buoyancy was pure luck that had nothing to do with the UPA’s own policies, what followed in 2008-10 was even more luck. This is how it played out. The UPA’s spend-spend-spend policies created rampant inflation and by 2008 (August 2008) the wholesale prices index (WPI) was hitting a 13-year high of 12.44 percent. The Reserve Bank was feverishly pushing up interest rates. If this had continued, UPA would certainly not have won its big mandate in 2009.

This is where dumb luck helped again. When the Lehman crisis broke cover in September 2008, the world economy went into a tailspin and oil prices crashed. Even though GDP growth fell, UPA-1 reaped a huge windfall in the form of a dramatic fall in inflation (despite huge spending) that had nothing to do with any policy effort. By June 2009, inflation, in fact, turned negative (and let’s remember, May 2009 was when the UPA won re-election).

The year 2008-09 was the UPA’s sweet spot that coincided with election-time.



Thanks to fears of recession, the government did what it does best – spend mindlessly – and several spending or economic giveaway schemes were unleashed: a Rs 1,80,000 crore stimulus package (which was needed, of course), a Rs 70,000 crore farm loan waiver, huge increases in pre-election minimum support prices for farm products, and huge spends on schemes like NREGA. To top it all, UPA-1 also provided urban and rural consumers huge subsidies in petro-products and fertiliser.


If you take the combined effect of oil and fertiliser subsidies so far, the farm loan waiver, the post-Lehman economic stimulus, the big increases in social spending, and the proposed spending on the Food Security Bill in the run-up to 2014, the amount spent would not be less than Rs 10,00,000 crore – yes, ten lakh crore – since the UPA was first elected in 2004.

No government can spend so much – most of it wastefully – and still avoid the charge of economic mismanagement. Voodoo economics was rescued from its consequences – high deficits and high inflation – in 2009 by the global meltdown. But the real impact remains on our account books in the form of huge fiscal and current account deficits.

With a fiscal deficit of 5.9 percent in 2011-12 and a current account deficit estimated at 4 percent of GDP (the highest ever, which is sending our rupee crashing), UPA-2 is reaping the whirlwind on its voodoo economics.

The Indian political-economy follows a dialectical pattern where reform is balanced by redistribution in turn. The late 1980s fiscal crisis resulted in the reforms of 1991. When electoral needs forced Narasimha Rao to shift the focus back to spending, inflation soared and growth slowed down during the UF and NDA years – which forced them to push the envelope on reforms.

UPA-1 reaped the benefits of both domestic reforms and global growth. But UPA-2 needed to push reforms at least for the initial two to three years to reap the rewards in 2014. This is why it failed. It said a pass on reforms, and is about to pay the price.

By focusing on 2014 in 2009, and refusing to acknowledge the role of luck in 2004-09 in its economic performance and political rejuvenation, UPA-2 compounded voodoo politics with voodoo economics.

The result is stagflation – which we have called Rahul-flation in the past since voodoo economics has been unleashed by the need to elect him PM in 2014.


But without reforms and the abandonment of voodoo political-economics, UPA-2 is likely to bite the dust.

Why UPA-2 has failed: Voodoo politics and economics | Firstpost

Nails Down Perfectly What has been Happening in the Country since 2004.
 

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Few Days Some Muslims were Accusing BJP of Blocking Legislative Bills in Parliament. Need Some Reality Check.

The UPA may accuse the BJP of being an irresponsible opposition and stalling key legislative business in Parliament, but when it comes to lending support for passing laws in BJP-ruled states, its track record does not seem any different.

More than 20 Bills are hanging fire in states where the BJP is in power, some for more than two years now. These have been kept pending either by the governor, who actually cannot withhold consent, or by the President, whose approval is necessary for the Bill to become law.

The states include six where the BJP is ruling on its own and one where it is in alliance with the JD(U).

Some of the Bills appear to have been stalled for good: Like the GUJCOC (Gujarat Control of Organised Crime) in Gujarat and MPTDACOC (MP Terrorism and Disruptive Activities and Control of Organised Crimes) in Madhya Pradesh — both legislations aimed at fighting terrorism. Refusing to pass them, the Centre has contended that there is no need for a separate law to fight terror when the UAPA (Unlawful Activities Prevention Act) already exists. A few others, like the Bills relating to education in Bihar, are being blocked as these dilute the powers of the governor in his ex-officio position as chancellor.
Blocking, UPA style: Governors, Centre stall over 20 Bills in BJP-ruled states - Indian Express
 

Tangent

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.....who is running the country...?
MMS ?? No..
Sonia....She is dangerous...All authority ...no responsibility...no accountability...
 

westtowel

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1947 -1991-Gandhi family rule-poor India.
1991-2004-No-Gandhi family rule-Booming India .
2004-2012-Gandhi family rule-poor India.
Gandhi Family is :partay:
 

Dharmachakra

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Though I am against Congress since grade 6 means for over quarter decade,either due to its policies or its authoritative stance and anti national and pro-gandhi family nature.

But I am no stanch supporter of either BJP nor left.

If there is a purely secular party and is 100% nationalist ,I will serve it till my death through all possible means. I even dont like voting to these corrupt b@$tards of any party and didnt do till now.
If there is a right to reject vote in elections, I will even do rigging to reject all these @$$ holes.

India primarily lacks 3 Things at the national Level.

1) A pure Nationalist party that can secure control of all states and union-territories along with staying in power at the center.
2) Lack of Vision on how to eradicate poverty and improve growth prospects instead blindly following the curve
3) A good foreign policy.If one looks at the immediate neighborhood, we have more enemies than friends.Even tiny states dont care us.

And when it comes to Congress and UPA I/II its a miserable failure. Their primary agenda being staying in power as long as possible while robbing the nation.

Another motive of all hail the Gandu family since someone did something in the past. Its like our "grandfathers licked honey and now you have lick our boots."

During the past 60 years since independance it was cong that was in power for 95% of the time and the corruption and mis-administration grew manifold during its tenure.

The only reason why Cong is not serious about black money is, it will never come into power again it strict laws are made, since all the black money holders are from the same party or relatives or family members,....

We Indians can only pray to GOD to send a real leader who can guide these sheep while upholding morality and justice.
 

Dharmachakra

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May 23, 2011
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Though I am against Congress since grade 6 means for over quarter decade,either due to its policies or its authoritative stance and anti national and pro-gandhi family nature.

But I am no stanch supporter of either BJP nor left.

If there is a purely secular party and is 100% nationalist ,I will serve it till my death through all possible means. I even dont like voting to these corrupt b@$tards of any party and didnt do till now.
If there is a right to reject vote in elections, I will even do rigging to reject all these @$$ holes.

India primarily lacks 3 Things at the national Level.

1) A pure Nationalist party that can secure control of all states and union-territories along with staying in power at the center.
2) Lack of Vision on how to eradicate poverty and improve growth prospects instead blindly following the curve
3) A good foreign policy.If one looks at the immediate neighborhood, we have more enemies than friends.Even tiny states dont care us.

And when it comes to Congress and UPA I/II its a miserable failure. Their primary agenda being staying in power as long as possible while robbing the nation.

Another motive of all hail the Gandu family since someone did something in the past. Its like our "grandfathers licked honey and now you have lick our boots."

During the past 60 years since independance it was cong that was in power for 95% of the time and the corruption and mis-administration grew manifold during its tenure.

The only reason why Cong is not serious about black money is, it will never come into power again it strict laws are made, since all the black money holders are from the same party or relatives or family members,....

We Indians can only pray to GOD to send a real leader who can guide these sheep while upholding morality and justice.
 

dearone4u_22

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I know this Con-great ppl have taken nation to trash but they have taken some bold steps too...

Delinking Petrol And Diesel was a political suicide but they did it...it will help lessen the subsidy burden on treasury.....

They have clear many defence deal that were hanging in limbo for yrs ..although it took a leak from army chief to wake up this guys......

But still the rampant Corruption they brought along washed away their good work ......And they deserve to be thrown out of power.....:angry:
 

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Though I am against Congress since grade 6 means for over quarter decade,either due to its policies or its authoritative stance and anti national and pro-gandhi family nature.

But I am no stanch supporter of either BJP nor left.

If there is a purely secular party and is 100% nationalist ,I will serve it till my death through all possible means. I even dont like voting to these corrupt b@$tards of any party and didnt do till now.
If there is a right to reject vote in elections, I will even do rigging to reject all these @$$ holes.

India primarily lacks 3 Things at the national Level.

1) A pure Nationalist party that can secure control of all states and union-territories along with staying in power at the center.
2) Lack of Vision on how to eradicate poverty and improve growth prospects instead blindly following the curve
3) A good foreign policy.If one looks at the immediate neighborhood, we have more enemies than friends.Even tiny states dont care us.

And when it comes to Congress and UPA I/II its a miserable failure. Their primary agenda being staying in power as long as possible while robbing the nation.

Another motive of all hail the Gandu family since someone did something in the past. Its like our "grandfathers licked honey and now you have lick our boots."

During the past 60 years since independance it was cong that was in power for 95% of the time and the corruption and mis-administration grew manifold during its tenure.

The only reason why Cong is not serious about black money is, it will never come into power again it strict laws are made, since all the black money holders are from the same party or relatives or family members,....

We Indians can only pray to GOD to send a real leader who can guide these sheep while upholding morality and justice.
I think BJP Completely Satisfies all the 3 Requirements. At Least When They are in Power.

BJP is the Only Proven Player in the Sub Continent among the Gandus, The Nehrus, The Bhuttos, The Sharifs, The Hasinas, The Zias and the Commies.

Compare their 5 Year Rule to any Rule Out of the Above Fuckers of the Last 65 Years. They are the Text Book Players, Done What is expected of them and Perfect Execution. :tup:
 

Tshering22

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UPA failed because it thrives on two things:

- Inciting communal hatred
- Dividing India's public
- Caste politics
- Intentional ceremonial ism
- Draining national wealth
- Inviting non-Indians by providing them fake IDs to vote in their favor-- buying votes.

This can give momentary benefits, but truth will stand tall at the end and this government (entire regime) will fall soon. Evil cannot be perennial.
 

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