Narendra Modi vs populism showdown set to take centre stage in 2024 Lok Sabha election

It is indeed Bihar Chief Minister Nitish Kumar’s achievement that he was able to bring 18 Opposition parties together in Patna to take on the Bharatiya Janata Party in the general election next year. The proposed grand alliance is in its embryonic stage, so it would be premature to even speculate the policy framework it would be inclined to adopt. Yet, going by the past experience and the ideological orientation of the major constituents, it is not difficult to foresee the basic contours of policies and programmes the alliance, if successful, would prefer. Let’s begin with economic policy. Populism will be the defining feature of the proposed alliance’s policy. This is not to say that Prime Minister Narendra Modi and his ministers are the followers of Milton Friedman and Ayn Rand, that they are loath to populist measures, even freebies. In its election manifesto for the recently held Karnataka election, for instance, it had promised three gas cylinders every year to BPL families. It is another matter that in the recent past the prime minister and many ruling party functionaries have spoken against freebies. At any rate, there are no absolutes in real life, surely not in India. There are politicians who are more likely to let the economy function with little state interference, as also the ones who like to meddle in economic processes and thrust tedious compliances on businesses. Importantly, all manner of parties have all manner of politicians. On the whole, however, the Modi government is less inclined to buy votes by using taxpayer money. This is evident from two facts. First, it did not go on an expenditure spree in the name of pump priming the economy, even during and in the aftermath of the Covid pandemic. This is no mean feat. In the run-up to the annual Budget every year, a large section of economists and experts beseech the finance minister to ‘loosen the purse strings’ because ‘this time it’s different.’ For there is some crisis, natural or manmade, every year which adversely affects the economy in some way or the other, prompting demands to throw fiscal caution to the wind. In recent memory, the last three years one could have said with reasonable justification that ‘this time it’s different’. And yet, it is to the credit of Prime Minister Modi and Finance Minister Nirmala Sitharaman that the government didn’t fall prey to the meretricious charms of pump priming arguments. In 2020-21, the fiscal deficit stood at 9.3 per cent of GDP. That was extremely high but not incomprehensible, because this year had borne the brunt of economic damage caused by Covid. The next fiscal, it came down to 6.7 per cent, decreasing slightly in 2022-23 to 6.4 per cent. In the current fiscal, it is estimated to be 5.9 per cent. The revenue deficit has also been dipping—from 4.4 per cent in 2021-22 to 4.1 per cent in 2022-23 to 2.9 per cent in the current fiscal. By any reckoning, the Modi government’s fiscal conservatism is admirable. No less admirable is its commitment to build infrastructure. The effective capital expenditure by the Centre is Rs 13.7 lakh crore, which will be 4.5 per cent of the GDP. It is a well-known fact that there is a lag between infrastructure building and its effect on the economy and people. This also means that the short-term electoral gains of infrastructure building are limited. The Congress, on the other hand, seems focused on populist measures. It may dislike the Aam Aadmi Party, but that hasn’t stopped it from learning from AAP’s success formula. So, to win Karnataka, the GOP promised a scheme to provide Rs 2,000 per month to woman-headed households, a monthly allowance to unemployed graduates and diploma holders for two years, 10-kg rice per person per month to BPL families, 200 units of free power to every household, and free bus commute for women. The taxpayer will bear the burden of the new Karnataka government’s munificence; it is estimated in excess of Rs 50,000 crore a year. The southern state’s fiscal deficit for 2022-23 was of Rs 60,581 crore, or 2.6 per cent of the gross state domestic product (GSDP). This seems set to exceed 5 per cent this fiscal, much above the 4 per cent cap recommended by the Finance Commission. If we have a panoramic of fiscal policy and government spending of the last quarter of a century, we find that the BJP-led regimes’ foci have been fiscal consolidation and capital expenditure, whereas the Congress governments’ have been fiscal irresponsibility and revenue expenditure (Nrega and other entitlements). Even in the areas where the Modi government is severely criticized, both in India and abroad—those related to civil liberties, human rights, and individual freedom—no Opposition party has offered anything substantive. All they have done is slam the government for its actions; but they haven’t offered anything that can be called a viable alternative. Neither in economic policy nor in governance. The author is a freelance journalist. Views expressed are personal. Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.