Politics Vs Economy in India

The following post was contributed by Venkatesh Geriti, Founder of SFLSI

India’s founding fathers opted socialism for India, occasionally adding some liberal principles like freedom of speech or secular equal voting rights. All Indians feel proud to be living in the world’s largest democratic country. Democracy has been India’s biggest achievement in the last 60 years of Indian politics. The politicians are the law-makers of the country both at the national and
provincial level. They need to make good laws to protect people’s rights and ensure them justice. Most Indian political parties are socialistic parties with the agenda of encroaching upon the freedom of people and making dictates to them under the disguise of the state.

In Indian politics, politicians and bureaucrats play key roles in the development of several sectors like manufacturing, infrastructure, service and agriculture. Instead of making economic progress, these sectors are geared toward political and economic crises.

In the 17th and 18th centuries, India had a 25% economic share in the global GDP. However, due to her lack of industrialization, India’s share in the global GDP had become 2% by India’s independence in 1947. India was a popular destination for free trade in the 16th and 17th  centuries, but severed her connection with global markets from the 1940′s to 1990′s. Indian liberalization in 1991 helped form good relations with international markets and made India one of the largest economies in the world.

Indians have come to realize the importance of liberalization and reform for development through the transition from poverty to prosperity. They are seeking quality in education and health, equal opportunities, rule of law and free markets.

Indian politics is quite complex because of the diversity of regions, languages, communities, religions and cultures. During elections, political parties try to entice uneducated voters with socialist freebies and short term benefits. Citizens fall for the trap and opt for short term benefits because of their poverty, illiteracy and lack of knowledge. In an era of competitive populism, parties that focus on developmental issues like infrastructure, economic growth, education and health care who refuse to offer short-term freebies are at a great disadvantage. As all parties soon learned to offer freebies, new forms of vote-gathering became needed to gain support. Politicians are profiting by virtue of being the people’s representative (i.e. from the money allocated for public development activities after winning elections). Unfortunately, bureaucrats also support such politicians out of fear of losing their own benefits.

Last year, the Indian youth came to the streets to advocate for the introduction of a strong anti-corruption institution. This bill was presented nearly 10 times for vote in the Parliament but has not been passed. Many political parties are trying to amend it in order to weaken it. The coalition of governments is posing a major problem in bringing about reform without being unduly amended.

Political parties genuine about long term reform are struggling to get votes. An Indian regional politician was quoted in a news magazine: “I am not giving free power [electricity] to people, and so people are not giving power [political] to me”. A political party announced free televisions for certain households and distributed them after winning the elections in the state of Tamil Nadu. A socialist party distributed laptops to all university students after winning the election in Uttar Pradesh.

Current national ruling parties passed two new laws (Food Security Bill and Land Acquisition Bill) to get rural people’s votes. These two bills would benefit people living in rural areas by providing them with short term benefits, eventually dismissing their attempt to climb out of poverty. Good reforms intended to enhance individual development and dignity lack political will to get passed in parliament.

The state feels that the global economic situation is the reason for the falling value of the rupee and the economic crisis. One cannot disagree that external situations do affect the performance of our economy in an increasingly globalized world. However, domestic problems have an even greater effect. Stuck in a cycle of rent seeking and short term benefits, the state is not making decisions on domestic problems like the unequal distribution of economic freedom, poor manufacturing and infrastructure, or power decentralization.

We as Indians cannot realize our full potential until we give the youth a chance to participate in the economy to create wealth. Our economy will strengthen and compete with other countries only when we begin to produce more than we consume. The government should create a conducive investment climate and support a skillful population rather than turning a blind eye towards corruption and fooling poor people in the name of subsidies. Leveraging the potential of the youth is the only way we can bring our country out of poverty and backwardness. We should elect leaders focused on bringing our economy back on track because failing to do so will result in another generation living in poverty and crisis. Let us not postpone change for the next generation.