Sunday, February 5, 2023
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It’s the Broker AND the Farmer

The NDA’s big failure was wooing the broker & ignoring the farmer. At some point, in the euphoria of one year of growth, it stopped talking to, and even talking of, the poor.

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In the scorchingly volatile evolution of the post-election politico-economic debate, a fascinating new question has emerged, particularly after the market reaction to the Budget. Who should matter more, the broker or the farmer? The farmers have the votes and brought the UPA to power. The brokers drive the markets and could not give the NDA another innings. The NDA ignored the farmer and paid for it. It is, therefore, fine for the UPA to focus on the farmer and the market, well, it may not be damned, but it better appreciate what has changed.

Or put it another way. If the markets don’t like the odd thing in the budget and decide to tank, should the government bother about its players and the other Sensex-watching classes, or should it be satisfied because the farmer is happy?

Other questions naturally follow. If the majority is—or should be—happy, why bother the small elitist class that is involved in the markets? Or, can you focus only on one constituency at a time? Does it have to be the broker OR the farmer? Are the interests of the two naturally contrary to each other’s?

For an insight, let’s turn to Amartya Sen who, speaking to this newspaper just after the election results, said: ‘‘..The markets can be used by all fruitfully, rather than by a few selectively, if basic education is widespread, if general healthcare is good, if land reforms have occurred, if micro-credit is widely available, and if initiative is encouraged even when coming from the underdogs of the society.’’

Would it be too wrong if the message one reads in this profound argument is, that for an economy and a society to really grow and prosper, the equation has to be not the broker OR the farmer. It should instead be, the broker AND the farmer.

Also read: Research shows intermediaries’ role is misunderstood. Local market realities more at play

The NDA’s big failure was wooing the broker and ignoring the farmer. At some point of time in the euphoria of one year of growth, it had stopped talking to, even talking of the poor. It forgot that reform was a good thing not only because it gave you a charging Sensex, declining interest rates and goodies on the shop-shelves of your mall, but also because it was the only way to bring more growth, create more jobs, make more farmers richer and capable of being included in this growing class of Indians for who a better lifestyle was now becoming a reality. Also, that it was the best way to reach succour to the very poor.

The NDA forgot to even try and convince the poor and the vast majority of rural Indians that reform was the best thing for them, it was the best and the only way to bridge the gap between them and the shopping mall-going (Sensex-watching) classes. The UPA now must not similarly make the mistake of not trying to convince the markets that nothing would work better for them than happier, richer farmers and that nothing would secure their comfortable lifestyles more than eradication of poverty, the narrowing of the great divide. The fact is, even more than the NDA, this government has people in key positions who understand this. Could it be that, until now, even they have been caught in this great intellectual confusion afflicting all of us with a good, middle-class, bleeding heart conscience yet with commitment to reform?

The solution is to change the nature of the discourse. The fact is, if you read the budget carefully, it actually seeks to bridge that divide. Amartya Sen said in the same interview that India ‘‘needs reform, and has needed it for a long time.’’ But, he added, that ‘‘reform is needed for equity-based reasons, as well as for economic efficiency’’ and said that his ‘‘main complaint’’ with the reformist agenda ‘‘has been its lack of radicalness.’’

You can take your time absorbing that. But perhaps one area where our reform lacked radicalness so far was the way it focused only on the industry, external trade, financial markets and larger regulation. It never tried to bring the economies of the big factories, the buying classes and the services of the big cities, the financial markets and the rural economy closer together. Chidambaram has, indeed taken a “radical” step in this budget to do so by bringing commodities trading to the bourses as well. A pity such a significantly positive step has been lost in the commotion over the turnover tax.

If there is one thing this election has ensured, it is that you cannot carry out economic reforms by stealth. The economy is now the central point of our political debate. You cannot carry on like the Chinese communists, who, as the late Sitaram Kesri, after a visit to Beijing, described to me to be like the drivers of the Delhi Transport Corporation buses: they signal to the left, and turn right. Because economics is now politics, you now need to be upfront.

To that, it is good that there is a CMP, and an evolving thought with the President’s and the Prime Minister’s addresses, now this budget and Manmohan Singh’s Independence Day address five weeks from now. The reformists in this government have some unique advantages and some old handicaps. The advantage is that the Left is now on board, the debate is out in the open and more about how much, how, and when and no longer over whether, why or what if.

The handicap is the backdrop of the last election, the vicious ideological divide with the BJP and the nagging question of whether reform gets you votes, or farmer-centric populism. Manmohan Singh, Chidambaram and their fellow reformers have too much intellect not to be able to figure this out. But even a good thing, if overly politicised, can become a curse. ‘‘India Shining’’ has now become a political liability and so much an object of ridicule that, for the other side (UPA), it is sometimes even becoming inconvenient to admit that overall things have got better for India and that we are on a growth curve that has never been within reach in the past.

The danger is, the very idea of a shining, resurgent, growing, assertive India could become a liability and an idea to be shunned rather than promoted just because it got overtly politicised. It has happened with us in the past. The Emergency and subsequent electoral politics gave the very noble idea of family planning such a political liability that it hasn’t fully recovered yet. It is, therefore, necessary for the reformers in this government to nuance the discourse now so we not only keep reforming, as this budget promises, but so that we also keep bridging the divide and convince those at both ends of it that nothing will bring them closer than reform, social equity, and growth.

Also read: Want to help farmers, remove middlemen? Scrap the law governing agri markets


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