Experts praising AAP’s political success but questioning its economic manifesto..

Aam Aadmi Party’s and Arvind Kejriwal‘s amazing journey from being a corruption activist to becoming Delhi’s youngest CM is stuff of fairy tale. And all this in just one year where people sped all their lives in politics tying to become some minister. And becoming a CM right away that too representing a party which celebrated its one year on 26 Nov 2013. It is all so surreal really.

Equally amazing is How Delhiites have voted so strongly for the party. Anyone you talk to in Delhi, says we knew they will win some seats but so many was never really believed. To see a change (if we can call it one) in India’s political capital is amazing to see.

Coming to the title of the post. As expected, there have been lot of praises from all corners (barring the opposition camp which is stumped for words). People have analysed the reasons for victory, challenges going ahead, how many days will it last etc..

Now there is another section which says AAP’s economic manifesto is full of  problems. Basically it is all about uneconomic stuff – cheaper electricity bills, free water etc. I picked some economic agenda from its manifesto:

Electricity: Delhi’s consumers have been getting inflated bills due to malpractices by Discoms. AAP promises a reduction of consumers’ electricity expenditure by 50%. This will be done by ordering an audit of discoms, rectifying inflated bills and getting electricity bills checked by independent agencies. Licences would be cancelled of any discoms that refuse the audit . 

 Discoms would be brought under RTI and their accounts made more transparent. Discome monopolies would be ended and consumers would be allowed to choose between two electricity providers. Incentives and subsidies to promote solar energy; target of meeting 20% of Delhi’s electricity needs via solar energy in the next ten years. Individuals installing solar panels in their houses would be allowed to sell extra electricity to the grid.
Water: Water is the biggest concern of the aam aadmi in Delhi, as more than 50 lakh people do not get piped water in their homes. AAP is committed to ensuring that all households in Delhi get water in their homes, irrespective of whether they are in slums or unauthorised colonies. Households using up to 700 litres of water (per day) would be given free water.
Transparency would be introduced in the functioning of the Delhi Jal Board, who currently keep no account of how much water is received from different sources and how much water is supplied to each area. Bulk meters would be installed and their data put on the DLB website every day. Clamp-down on tanker mafia. AAP opposes the privatisation of the Delhi Jal Board and is committed to the public provision of water to all citizens. Long run solutions to Delhi’s water situation would focus on city-wide rainwater harvesting, reviving Delhi’s water bodies and the conservation and recycling of water.
Inflation and Unemployment: While inflation is due to central government policies, AAP would take measures to ensure basic facilities remain within reach of the aam aadmi; these would include electricity expense reduction, 700 litres of water made available for free, government provision of high quality education and health , regulating fees of private schools and strict action against hoarders. 
For increasing employment AAP shall fill all vacant government posts, provide better facilities to industrial areas and provide young entrepreneurs loans at low interest rates.
Other Economic Issues:
  • Traders: Simplifying VAT structures and opposing FDI in retail
  • Industry: Improving facilities in industrial areas and simplifying licensing procedures 
  • Contract Labour: No contractual jobs for work that is required 365 days a year; ensuring implementation of minimum wages
  • Unorganised sector: Ensuring social security for unorganised sector workers; regulating wages and working hours of domestics workers; improving working condition of rag-pickers.
  • Street Vendors: licenses and fixed locations to be given to street vendors.
Then there are other econ things as well like education (prohibit donations in schools), health (open hospitals to poor)  etc as well. And then it is not limited to Delhi alone but perhaps applies to most other cities as well – water, electricity, etc.
Clearly a list which does not impress on economics grounds (this, this, this and many more). Earlier, they could just ignore AAP but how can they now? Considering how many econs Delhi belt has, they would be bewildered really. It is like replacing one populist party wit another. So much so for all the hoopla.
It is here that econs miss a lesson or two.
  • First, no matter how much you propogate, elections in India are not won by economics. It is won on politics and populism still works. Especially in these inflationary times, what else will people vote for? When basic things have gone to the roof people will vote for a party which promises to lower some part of the household bill. It may be disastrous in the end, but that is how things are. Live in the present…
  • Econs pointed and celebrated how populism lost its way in Rajasthan but at the same time were silent on how in Chattisgarh the ruling party won despite having so called populist measures. The reason is in Chattisgarh the benefits could reach people (atleast that is what the message so far is). Well, you can be populist but at the same time the benefits have to reach people. It is stupid to be just populist. UPA lost in states not because of populoism but because of serious negative wave against the party.
  • Elections in India are like Test matches. In both five is the common denominator, as maximum time for both test matches and governments is five days and five years respectively. Just like tests, surviving for five years is full of ups and downs. In tests, you never know as just one bad session could cost you the whole match. Same thing is in government too. Just one bad phase and you are out. So you may have done a great job in the rest of the four days/years but just one bad day/couple of months and all is lost. The opposition suddenly smells blood and turns the tables for what looked like a certain victory for the incumbent.
  • And then how else does one expect a new party to come to power without being a populist?  Can it come to power by promising so called prudent economic policy like people will have to pay the true price of everything. foreign competition will be allowed in sectors and so on. After twenty years of so called reforms, people still do not really understand the benefits of them. Perhaps they are not getting them as much as economists want us to think otherwise.  There are massive social upheveals especially for those that are left out of the globalisation rat race. So populism is what they look forward to and not the fancied economic reforms. And the numbers of such people remain large. How else does one explain these wins for parties which have poor economic manifesto?
  • The thing is most people do not even understand what these reforms mean. But if some party exploits this and tells people that reforms is what has led to current woes, people do understand this and vote accordingly. This also explains the reluctance of any political party trying to showcase its reformist credentials. NDA tried in  2004 and lost really badly..

Now, one can argue whether AAP’s economic policy is any useful. It could lead to issues later.

However, as people have voted for AAP in large numbers and that too in Delhi where one would expect people to be more econ-literate, it isn’t the case.. Atleast on the basis of results, people do not care much for so-called sound economics principles…

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2 Responses to “Experts praising AAP’s political success but questioning its economic manifesto..”

  1. Hemen Parekh Says:

    A System – based Solution

    DEAR PEOPLE OF DELHI :

    Of course , you have a right to complain to your government and seek solutions to your problems

    But then , 150 lakh people could each have a problem which , he / she wants solved ” yesterday ” !

    That would inundate your government , leading to a chaos , instead of satisfactory solutions !

    That is why Arvind said ,

    ” Give us 10 days time to put in place , a system ”

    You could help him devise / implement such a system

    To begin with , submit your complaints in the following ” Structured ” manner ( – should be NEATLY handwritten ) :

    ————————————-

    COMPLAINT FORM

    > Complainant Name

    > Age

    > Gender

    > Mobile No

    > Landline No

    > Email Id ( Optional )

    > Address

    > Nature of Complaint

    > To be attended by Dept ( your best guess )

    > Max no of days in which to attend ( be generous )

    > Date submitted ( date / month / year )

    ————————————————————–

    You may handover your complaint to ,

    > Government Secretariat

    > Arvind’s Residence ( deposit in box kept outside )

    > Nearest AAP office

    You gave previous Congress Government , 15 years for solutions of your problems – with no solutions

    Now give , at least 15 days to AAP government !

    Be reasonable ! Be patient !

    DEAR ARVIND :

    Here are a few suggestions for you,

    > Within 10 days , print and distribute such a Complaint Form , widely
    all over Delhi . Keep it simple ! In Hindi as well !

    > Make it downloadable from Delhi Government web site

    > Within 15 days , enable online submission of complaints on Govt web
    site . For each complaint , give comprehensive feedback . Make entire
    database searchable to any visitor , in a transparent manner

    > Within 30 days , start a Call – Center , where people can register their
    complaints over phone ( IVRS ? )

    > Within 45 days , launch Mobile App , ” Magic Wand ” , suggested by
    me , 2 days back

    * hemen parekh ( 30 Dec 2013 / Mumbai )

  2. Hemen Parekh Says:

    Robinhood of Delhi ?

    All of last evening , experts were debating on TV channels ,

    ” Is Kejriwal robbing Peter ( rich ) to pay Paul ( poor ) ? ”

    They were discussing the losses that Delhi treasury will suffer ( approx Rs 25-35 Crores per month ) due to ,

    > 20 KL 0f free water

    > 50 % subsidy on power ( up to 400 units / month )

    But AAP leaders are saying ,

    ” If Peter is rich and Paul is poor , then there is nothing wrong with robbing Peter to pay Paul ”

    What they are leaving unsaid is ,

    ” It is better to be a Robinhood than to be a Robbing Hoodlum !

    Robbing Hoodlums of Congress governments have been robbing the poor for the past 66 years and making the rich richer, and poor poorer !

    Dear Experts ,

    Will you please explain ,

    > Who got Rs 50,00000 Crores worth of Scam money in last 15 years ?

    > Who have deposited Rs 300,000 Crores worth of black money in Swiss banks ?

    > Which Industrialists / Businessmen have failed to return to the Nationalized Banks , Rs 200,000 Crores of loans – without any efforts at recovering the same ?

    > Which private money-lenders are making 20,000 farmers commit suicide every year , for failing to repay their small loans ?

    > Who are all travelling Air India on subsidized air-fares , which has bled the Government of Rs 100,000 Crores in past 15 years ?

    > To which businessmen have State and Central governments gave away – almost free – Rs 500,000 Crores worth of farming land to set up SEZ ?

    > How many sick ( ICU ? ) Public Sector Units have the poor people of India kept ” alive ” , by subsidizing them to the tune of Rs 100,000 ,000 Crores over the past 60 years ?

    Who got this money ?

    And if you dispute our figures , will you tell us the correct figures ? ”

    But since these ” self-appointed economic experts ” have no honest answers to these questions , they are telling AAP government ,

    ” You are not supposed to fulfill your poll promises by increasing the EXISTING levels of subsidy on water and power

    If you have only a few hours to survive , within that period , why don’t you ,

    > Lay 150 Km of water pipe lines ?

    > Install 20 lakh new water meters / replace 10 lakh defective ones ?

    > Ditto for Electric meters

    > Get CAG to finish its audit of 3 Discoms ?

    > Get DERC to announce new tariff , revised downwards by 50 % ?

    > Float tenders , finalize and appoint 6 Discoms ( to replace existing 3 ) ?

    > Study 200 files of CWG Scam tenders and file cases against corrupt government officers / contractors / politicians , who minted money ?

    Why can’t you do these things by tomorrow evening ?

    Don’t you know , extending existing subsidy % , is bad economics , even if it is good politics ?

    In any case , by precedence of past 60 years , bad economics has been solely our prerogative

    How dare you copy us , then claim originality ? ”

    AAP may choose not to answer

    But by May / June 2014 , 760 million voters will

    And depressed / tortured / raped / murdered / looted people around the World , will applaud an alternative to violent Arab Spring !

    Mahatma will rise from the Rajghat !

    * hemen parekh ( 02 Jan 2014 / Mumbai )

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