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Last Updated: Thursday, 22 July, 2004, 09:12 GMT 10:12 UK
Letter: Heat and dust of political reform

By Vinod Mehta
Editor of Indian weekly magazine, Outlook

Chandrababu Naidu former Chief Minister of Andhra Pradesh
Chandrababu Naidu - a top politician accused of ignoring the poor
Vinod Mehta in Delhi assesses the political heat and dust surrounding the nation's poor. How are they making their presence felt - and what impact are they having on the champagne lifestyles of the rich and powerful?

Reform has become one of the most controversial words in India's political vocabulary. I know two economists who no longer speak to each other because of differences over reforms. Their wives have fallen out too.

Reform has become something of a mantra, a panacea to make India an "Economic Superpower". For others, it means classical not compassionate capitalism.

A pro-reformist is seen as a supporter of the World Bank, the IMF, globalisation and free markets.

If you are anti-reform, you are seen as a pro-poor, pro-nationalisation and pro-redistribution of wealth.

Indeed, the anti-reformists have coined a new and rather neat expression - reform with a human face.

I recently had dinner with one of India's most distinguished economists with impeccable pro-reform credentials. "What is this nonsense you call reforms with a human face? What does it mean? How can reforms have a face?" he asked in a rage.

He was full of contempt for liberals, left-wingers and centre-left thinkers who maintain that reforms in India until now have made the rich richer and the poor poorer.

The debate resonates so powerfully in India because the Vajpayee-led government is widely perceived to have been voted out of power due to its neglect of the poor and pampering of the rich.
I see the face of my MP only when he comes begging for my vote. I will teach him a lesson
A rural voter before the May 2004 elections

Dr Manmohan Singh's new government has dramatically shifted gear and is publicly committed to ensuring that the benefits of reforms quickly trickle down to the poor.

As finance minister in 1991, he began the historic opening up of the economy by rapidly dismantling what was popularly known as the licence-quota-raj.

Before 1991, the Indian state did not just control the commanding heights of the economy; it was also in the business of making bread and running restaurants.

One big party

Pre-1991 when an Indian travelled abroad, he returned not just with Scotch whisky and Swiss chocolates - but brought back anything from shampoos to baked beans.

All over the world - airport duty-free shops were crowded with eager and frantic Indians. Today, shops, supermarkets and malls are groaning under the weight of imported goods.

Everything from the latest Mercedes, Cuban cigars and French champagne are available off-the-shelf.

India's middle-class has at once grown fat and rich - to an estimated number around 250 million and counting. Conspicuous consumption is conspicuous.

Serving caviar is considered a must at dinner parties, lounge bars and exotic Mexican cuisine are all the rage, a modest meal for two at a posh restaurant can cost the equivalent of US$150.

For the Indian middle-class it is one big party. Unfortunately, not everybody is invited.

At a conservative estimate 350 million Indians live in something close to absolute poverty. They live on less than one dollar a day.

Plight of the poor

Since India is the world's largest democracy and the poor take voting very seriously, these 350 million deprived citizens constitute a hefty and merciless conglomerate.

They have a distinct propensity to throw out their rulers. "I see the face of my MP only when he comes begging for my vote. I will teach him a lesson," one angry rural voter told me just before the May 2004 elections.

The pitiful plight of the absolute poor in India is no state secret. They are not tucked away in sanitised zones.

Thanks to the media and pressure groups, television news and newspapers are full of malnutrition deaths, reports of famine and gut-wrenching rural poverty.

You have to be a very foolish and very short-sighted political party to ignore such a critical mass.

Pro-reformists defeated

Nothing highlights such folly better than the fate of two chief ministers. Chandrababu Naidu ruled the state of Andhra Pradesh for 10 years. SM Krishna ruled Karnataka, whose capital Bangalore is considered India's Silicon Valley, for five years.

Ministers Naidu and Krishna were India's best advertisement for reforms - wined and dined by Bill Gates and the CEOs of General Electric and General Motors - they were both held up as "models" by the Western media.

Mr Naidu was chosen by Time magazine as South Asian of the year in 1999 and the New York Times described the state of Andhra Pradesh as an "international model".

Indian women cooking
India's poor are no longer voiceless

Yet both were booted out in the May election because they ignored the impoverished rural areas - where cases of suicide were rising due to abject poverty and mounting debts.

I met Mr Naidu last week in Hyderabad. Out of power in his cramped, slightly shabby office, he looked a chastened man. Like all politicians he was certain the people of Andhra Pradesh would soon return him to power.

"Do you think the farmers' suicides brought you down?" I asked him. He replied he was not anti-farmer but that is the way he was unfortunately perceived. He blamed the media for projecting him as pro-rich.

Bold reforms

It is no coincidence that in his first journey out of Delhi, the new Indian Prime Minister, Dr Manmohan Singh, travelled to Andhra Pradesh to console the widows of the farmers who had committed suicide.

He went with folded hands, cheques and promises of jobs for the bereaved family. His spin doctors made sure his generosity was well covered by TV cameras.

The prime minister claims his mission is to "wipe every tear from every face" and while the 350 million have-nots will treat that promise of concern with scepticism, India's deprived and destitute are no longer a voiceless, forgotten and timid minority.

Despite the fact that they are largely leaderless, that their political representation in parliament is minuscule, and they are divided by caste, ethnicity and religion, the poor are a huge and enormously powerful mass who need to be wooed and won over by any party seriously interested in winning a national election.

In the past, their vote could always be bought. Not anymore, Election 2004 witnessed a major shift - the poor of India are no longer for sale.

This being India nothing is what it seems. As if the squabbling over reforms was not enough, another dispute has opened up. How can the government ensure that the money allocated from New Delhi trickles down to the villages?

Delivery systems

The late Prime Minister, Rajiv Gandhi, once declared that out of the billions of rupees the state spends on poverty alleviation, only a fraction reaches those it was intended for.

Indeed, he put a figure on the fraction - believing only 15% trickled down with corrupt officials siphoning off the remaining 85%.

Not surprisingly, the buzzword in the capital today is "delivery systems". There is no use throwing money at the poor if it does not reach them. "Fixing the delivery system should be one of the central planks of reforms," notes one community leader.

There is an emerging consensus that the state will have to find new and innovative ways to ensure that 85% of the funds are not stolen.

No one yet has come up with a blueprint of how this theft can be stopped, but for the first time serious thought is being given to the mechanics of implementation.

Humanising capitalism has been tried elsewhere without much success. So what chance does broke, over-populated India have to show the rest of the world how to spend public money on public schemes efficiently?

I believe we have a 50-50 chance because being a nation of pragmatists we have set ourselves realistic goals.

As India's finance minister observed: "Even if 20% reaches the poor I would be happy." So, you see, the great Indian trick is to accept partial but not full corruption.

Vinod Mehta is one of India's leading journalists and editors. He is the author of three books and president of the Editors Guild of India.

Letter is a new BBC World Service series in which one of a panel of international broadcasters reflects on the latest political, cultural or social developments in their region.


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