ARE VOTERS EULOGIZING CORRUPT & FRAUDULENT LEADERS?

The epoch from August 2004 to August 2009 can be termed as THE DARKEST AEON for the state of Andhra Pradesh in India. Andhra Pradesh was then governed by Congress chief minister Y.S. Rajasekhara Reddy, who indulged in big ticket spending programmes; some of them supposedly developmental and others populist. However, all the spending programmes were beset with massive corruption, with some large irrigation, infrastructure and Industrial projects just confining to the files.

Nevertheless, Y.S. Rajasekhara Reddy was a leader with a saviour face but with a sinister heart as CBI and the Enforcement Directorate (ED) investigations have revealed. He allegedly abused his official position to help his son build his business empire by bestowing favours on individuals and entities. Squarely and unfairly, his son Y.S. Jaganmohan Reddy amassed wealth by pressuring companies to "invest" in his businesses in return for various favours bestowed by the YSR Reddy government, an innovative and unconventional corruption.

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However, Y.S. Rajasekhara Reddy and his cronies excelled at marketing and popularising with the masses, many of the yet to take off projects and all exchequer draining "politically popular" social programmes which have reaped him immense political benefits after his first 5 year tenure as Chief Minister. Y.S. Rajasekhara Reddy, politically succeeded as voters unaware of the massive corruption underlying the big ticket spending re-elected him for a second term too. As the tentacles of corruption reached far too wide, the KARMA caught up with the father and he died in a Helicoptor crash in August 2009. Still unaware of any of their wrongdoings, people of Andhra Pradesh showered immense sympathy towards his son and other members of his family, post the crash. Seizing the opportunity, the wealth hungry son turned power hungry too and demanded the Congress leadership to anoint him as the successor in the state. However, Congress leadership, known for their unfathomable PRIDE, did not budge to the demands of Y.S. Jaganmohan Reddy, which resulted in the son walking out of Congress party and start his own outfit, which had the solid backing of colossal wealth amassed in just 5 years. In order to make his outfit a political force he eulogized his father as “MAHA NETA” (A great leader) through mass contact programmes and Print and electronic media owned by him. He succeeded to a great extent in his endeavour of eulogizing his father as a great leader, which made him a political force to reckon with. However, Congress leadership, seething in anger for defying their diktats, triggered investigations by CBI and ED, which saw Y.S. Jaganmohan Reddy being arrested. However, political alignments changed with in the state due to ugly rise of separatist demands, which facilitated a truce between Congress leadership and Y.S. Jaganmohan Reddy that set him free to pursue his political goal.

Alas, Y.S. Jaganmohan Reddy was able to create a formidable impression on

a   .      A segment of voters who seem to be fine with corruption so long as some of the money trickles down to them.

b   .      A segment of naive voters who still eulogized his father

c   .      A segment of voters who were beneficiaries of his father’s regime.

d   .      A segment of gullible voters with caste and/ or religious affinities.

To the dismay of many, Y.S. Jaganmohan Reddy has polled 12.8 million votes in the 2014 elections vis-a-vis 13.3 million votes polled for the party that is voted to power. It is spine chilling, when one thinks of, how democracy can be undermined with ill gotten wealth, eulogizing demised corrupt leaders and abusing caste and/ or religion for political gains.

Andhra Pradesh is NOT YET OUT OF DANGER OF RELAPSE OF THE DARKEST AEON, unless wisdom dawns upon half the voters of the state.

(Disclaimer: Corruption is rampant in India and it afflicts every ruling party. As per consensus among whistle blowers and corruption fighting activists, five to seven per cent is lost to corruption, but in Y.S. Rajasekhara Reddy's irrigation programmes that figure is more than 15 to 20 per cent. Although, I am disgruntled with most parties for their apathy to curb corruption, I believe in lesser evil being the best to take both state and country forward.)

ECONOMIC CHALLENGES FOR THE NEW INDIAN FEDERAL GOVERNMENT

Economic de-growth coupled with increasing unemployment, widening social and economic inequalities, high inflation, increasing corruption, low wages, etc., are generally the key factors that contribute to growing Social unrest in a society. Unfortunately, the country is gradually and steadily drawn to the brink of social and political unrest with some non economic issues as well with regional bandits and extortionists in the guise of politicians emptying public finances and resources through quid pro deals with shady business houses, demanding large protection moneys from business houses thereby poisoning business climate in the country, instigating social unrest for regional autonomy, injecting racial and seudo-secularistic venom among people, brazenly and overtly supporting (onion, pulses & sugar) hoarders, using autonomous government agencies to settle personal scores and so on.  The new Indian Federal government to be sworn in May or June 2014 inherits bountiful economic, political and social challenges from the inept & corrupt outgoing UPA2 government. Hence, contrary to the demands of investment and business communities for big bang reforms instantaneously after assuming office, the new federal government may not be in a great situation to prioritise the economic challenges ahead of existing political and social challenges.

The key economic challenges for the new government are reviving the economic growth cycle, Fiscal consolidation by boosting tax revenues coupled with sustained reduction of subsidies and non-revenue expenditure, sustaining the improvement in the current account deficit, complementing anti-inflation efforts, improve governance; infusing dynamism among bureaucrats, instil confidence in the government machinery, improving co-ordination among different ministries and government bodies, removing bottlenecks for foreign and domestic investments and credible measures to counter the much- feared impact of El Nino.

However, the new federal government may be in a piquant situation very often subsequent to assuming office, with state governments demanding higher share of revenues to subsidise their populist pre-poll promises as well they may oppose some key economic policy decisions (importantly, the Implementation of GST across the country) which may not auger very well for the revival of the economy. Moreover, if the government choose to expedite capital spending to orchestrate a cyclical turn in the Investment cycle and boost long-term growth, the short-term casualty will be the debt/Gross Domestic Product (GDP) ratio, which is a catch 22 situation for the Federal government.

It is widely speculated that most of the economic data furnished by the government agencies in the recent years is neither credible nor reliable due to possible sovereign rating (by rating agencies) down grading fears. Hence, in the highly optimistic scenario, India can achieve only a REAL growth rate of 4.6% in FY2014-15 and 5.4% in FY 2015-16, considering all the social, political, Economic and natures (El Nino) challenges.

EL NINO AND ITS IMPACT ON INDIAN ECONOMY

El Nino is a weather phenomenon arising from warming of sea-surface temperatures in the Pacific Ocean around the equator resulting in changes to wind patterns that can trigger floods and drought thereby curbing food supply. A majority of weather forecasting models indicate that chances of a strong El Nino developing around the middle of 2014 exceed 70 per cent.

A spike in Pacific Ocean sea temperatures in 2014 as compared to those seen in previous El Nino years and the rapid movement of warm water eastwards have increased concerns that an El Nino weather pattern this year could be one of the strongest in several decades, according to an Australian climate scientist Dr Wenju Cai. 

However, the UN World Meteorological Organization had indicated during mid April 2014, that it was too early to assess its likely strength. Meteorologists say the prospect of an El Nino will likely be firmed up in the next month or two, although forecasting the strength of such a weather event is hard to do.  Australia's weather bureau and Japan's meteorological agency are expected to issue their next El Nino outlook reports by mid May 2014. 

Incidentally, the worst El Nino on record in 1997-98 was blamed for massive flooding along China's Yangtze river that killed more than 1,500 people. A strong El Nino this year will increase fears that production of many key agricultural commodities in Asia and Australia will suffer. 

A good agricultural performance is a must for India to raise demand for services and industrial products. Also, about 30 per cent of the manufacturing sector is agriculture-based and a bumper crop ensures the supply of raw material for industry at relatively lower prices. About 60 per cent of net sown area of the country is rain-dependent. Hence, India is very much ill prepared to face a strong El Nino, especially when its gross domestic product (GDP) growth has hit the nadir of 5% in 2013 and every 1 percent deficiency in rainfall will result in reduction of India's GDP by 0.35 per cent.

However, Stanford scientists too have warned of a likelihood of a weak monsoon in India with significant changes in the patterns of extreme wet and dry spells during the monsoon which may increase the risk of drought and floods in central India, which is the core of the monsoon region and has extremely high population densities that depend on rain fed agriculture. According to Indian Meteorological Department, Wet and dry spells are defined as three or more consecutive days of extremely high or low rainfall, respectively and rainfall during the months of July and August, are considered as the peak of the South Asian summer monsoon. The South Asian summer monsoon is an annual wind-driven weather pattern that is responsible for 85 per cent of India's annual precipitation and is vital for the country's agricultural sector. Researchers, including two Indian origin-scientists, show that the intensity of extremely wet spells (short periods of very heavy rainfall can create humanitarian disasters) and the numbers of extremely dry spells during the South Asian Monsoon season (during critical crop growth stages, too many days without rain can reduce yields or lead to crop failure) have been increasing. Private weather forecaster Skymet expects 'below-normal' monsoon this year with a probability of 40 per cent. 

India is expected to see 'below-normal' monsoon this year with Met department (IMD) forecasting 95 per cent rainfall because of the El-Nino effect. According to an Assocham report, about five per cent deficit of rains due to possible El Nino factor could have a bearing on economic growth by 1.75 per cent in the 2014-15 fiscal (loss to the GDP of about 1.75 per cent is almost Rs 1,80,000 crores) affecting lakhs of unskilled jobs. Additionally, deficiency in rains and drought conditions could also increase food inflation, higher imports, widening of Current Account deficit, depreciation of Indian currency vis-a-vis other currencies thereby spooking up energy prices.

STEPS TO LIMIT EL NINO EFFECT:

  Assocham submitted a report to the Government highlighting the strategy to be implemented immediately to minimise the El Nino effect on Indian economy. The strategy is as follows:

1. The government must expand the farm insurance cover and advise financial institutions to settle crop insurance claims in drought-hit areas without delay.
2. High quality seeds of alternate crops should be distributed among farmers in the drought-affected areas.
3. The minimum support price (MSP) of alternative crops to be cultivated in drought-hit areas should be kept attractive.
4. The government should realistically assess the situation in order to estimate the shortfall of oilseeds and pulses and help the traders with market intelligence.
5. The government shall bring down the cereal inflation by liquidating the extra stock that the government is keeping over and above the buffer requirements.
6. Scrapping of the APMC Act
7. Free flow of agricultural goods across states to bridge demand- supply gap
8. Prevent hoarding
9. Create relief employment programmes
10. Prepare alternative cropping plan and fuel subsidy to farmers to protect standing crops.