THE United Progressive Alliance (UPA)-2 and the Congress party have not fared well over the past two years, with both the government and the party more beleaguered than ever before. The inability of UPA-2 to carry forward the agenda of social and economic inclusiveness has left the people confused. It has failed to take concrete political and administrative measures to overcome the disconnect between the projected socio-economic objectives of the party and the priorities of the government that it leads at the Centre and in several states, which seem to be at odds with the popular mandate.

There is a pervasive sense that UPA-2 lacks direction and a clear policy framework, and in consequence the Centre does not hold. The party’s own lack of cohesion aggravates the problem as it appears torn between differing positions and strategies on key policy issues. In light of the current tumult in Indian politics, a comparison between UPA-1 and UPA-2 is worth making for what it can tell us about the changing role of the Congress and its future.

The Congress surprised everyone when it defeated the BJP-led National Democratic Alliance (NDA) and returned to power in the 2004 parliamentary elections at the head of a coalition, the UPA, and by getting re-elected in 2009, something it had not done since 1984. This landmark election resulted in both the BJP and the CPI(M) becoming politically weaker, but paradoxically the Congress party appears weaker too. It has not only failed to make any significant gains in states which it had lost to the opposition in the past decade – notably Bihar, Uttar Pradesh, West Bengal, and Tamil Nadu – but also faces the imminent threat of losing its bastion, Andhra Pradesh, which currently has 33 party MPs in the Lok Sabha, due to the Telangana fiasco and Jaganmohan Reddy’s decision to quit the party in 2010. The breakaway YSR Congress swept the by-elections in June 2012. The party’s overdependence on the Nehru-Gandhi family to take all major decisions remains an enduring structural fault line in the party.

Congress After Indira: Policy, Power, Political Change tracks the political development of the party from 1984 to 2009.¹ It is a story of precipitous decline and an equally dramatic recovery under a leadership which resolutely focused on redistribution to counter the BJP’s political-communal appeal. It shifted the debate from identity politics to distributive justice and secularism and this would create substantive difficulties for the return of the NDA in 2009.

From 2004 to 2008, India experienced heady growth averaging eight per cent. The overall achievements of UPA-1 were considerable: the right to information act, the employment guarantee scheme, and larger allocations for the social sector. By comparison, UPA-2 appears unimaginative and purposeless: there is a rapid decline in economic growth, a resurgence of inflation hurting the ordinary people, stagnation in industry, infrastructural bottlenecks, and a middle class inspired civil society revolt against the corrupt and grasping political class. With hindsight, it is clear that the success of UPA-1 was contingent on circumstances discussed below that marked a political breakthrough which was responsible for the party’s electoral success in the 2009 parliamentary elections and has since UPA-2 been conspicuous by its absence.

 

Recent analyses have pointed to a design flaw in the model of governance adopted by the UPA-1 and 2 dispensations: the dual power centres that place party above government and organization above parliamentary party may be seen as the root of the problems responsible for the ‘policy paralysis’ and crisis of governance under UPA-2.² However, during UPA-1 this arrangement did not lead to any policy paralysis, and indeed there was no apparent want of policy-making initiatives and policy implementation. We, therefore, need to look beyond institutional mechanisms to politics and new innovations in UPA’s policies, especially towards poverty reduction, secularism and minorities as significant factors in reconfiguring the strategies it pursued and political formations that support it.

Critics have routinely blamed the Congress leadership and the dual centres of power for the policy paralysis under UPA-2, yet the same arrangement worked well under UPA-1, in part due to the aura surrounding Sonia Gandhi’s renunciation of the post of prime minister and an apparent attempt to balance growth alongside equity to trump communalism.

UPA-I did have its share of troubles, but there was a National Common Minimum Programme (NCMP) which provided an agreed road map and the coordination committee zealously guarded against any deviation from it. Even though the Congress had fewer than 150 seats, Sonia Gandhi had a hegemonic position in UPA-I and her emphasis on the social agenda was the trademark of the government. She does not seem to be playing a similarly decisive role in setting the policy agenda this time, even as UPA-2 gives the impression of floundering from one crisis to another. UPA-1’s electoral success rested on a balance between Manmohan Singh’s pro-market agenda and Sonia Gandhi’s focus on social welfare policies.

 

Post-2004, the UPA launched path-breaking initiatives like the Right to Information, Rural Employment Guarantee, the National Rural Health Mission, drinking water and sanitation schemes, and farm loan waivers which had a force-multiplier effect. These welfare schemes served the strategic purpose of neutralizing communal politics and helped to direct attention to redistributive policies which paid electoral dividends. Furthermore, the UPA government’s performance and delivery on its social policies mattered to the Congress in positioning it as the party of the aam aadmi.

Taken as a whole, the political payoff derived from the party’s ability to advocate and maintain the dualism of growth/distribution and rich/poor within itself. This flexibility was facilitated by the availability of higher public revenue (four times greater than in 1990) which the UPA government could invest in addressing some of the pressing needs of the people without having to compromise on the profits of the corporate sector. This was the economic basis of reaching out to multiple constituencies. This blend of social welfare and the lure of the new economy saw the poor and middle classes gravitate towards the Congress.

 

Equally important was another set of contingent reasons, most notably the Congress-Left alliance, the foundation-stone of the UPA, and the internal leverage it gave Sonia Gandhi in relation to the conservative lobbies in the UPA government. The UPA government could not have been formed without support from the Left parties, and the latter’s insistence on a NCMP lent a progressive thrust to the coalition and provided it with the credibility to project itself as a pro-people government. External pressure from the Left parties forced the government to honour at least some of its own electoral promises and implement some popular schemes like the rural employment guarantee which electorally benefited the UPA. However, under UPA-2 there is no Left pressure outside and hardly any Left voices within the ruling party, pushing it towards politics and policies that are socially relevant and electorally viable.

After 2009, the Congress was much stronger in parliamentary support but it failed to capitalize on the momentum of change achieved under UPA-1. The government has been unable to push forward the legislative agenda on key issues such as land acquisition, food security, women’s reservation, and communal violence which were the basic ingredients of the 2009 election manifesto. An important reason is the lack of clarity within the Congress in relation to its policy platform. There are conflicting trends within the party on most issues, especially economic reform.

Two dominant positions are discernible. One is a nebulous social democratic platform that shares misgivings with regard to economic reforms, favours an accommodative approach towards the marginalized and the poor, and believes that such a position helps to differentiate and distance itself from the BJP. There are others who favour the neo-liberal position with an emphasis on high GDP growth, fiscal consolidation, and economic reforms required to push up growth. In many ways the current impasse can be characterized as a conflict between these two positions.

 

India’s growth has slowed down and the economic strategy of the past few years is showing signs of having lost steam. Economic crisis and downgrading by western credit rating agencies have played a role in changing the dynamic between the government and the party and between growth and welfare in favour of economic reform. It has helped the neo-liberals to strengthen their grip over the government in relation to the party, arguing that there is no option but to reform. Apart from the crisis narrative which ‘creates a space for reform in difficult times’,³ the change of guard in the finance ministry from Pranab Mukherjee to P. Chidambaram has also led to a flurry of announcements pointing to a resumption of reforms. The implicit belief that underlies government action is that foreign investment which has played a major part in India’s growth over the past decade will automatically be revived once the hurdles are removed. Not having access to FDI, for instance, is seen to be an impediment to reviving the economy.⁴

Corporate lobbies have been loudly campaigning against a ‘policy paralysis and demanding economic reforms. By this they mean removing constraints on organized business and giving preference in everything from cheap credit to captive power to big business and greater privatization of public enterprises and liberalized investment and trade.’⁵ This strategy entails not just permitting private investment but enlarging the areas from which they can reap profits. It means granting concessions and subsidies to the corporate sector at the expense of denying basic rights and entitlements, such as the right to food, employment, education, and healthcare, to the large majority of people.

Such a business-driven development model is a recipe for exacerbating inequality.⁶ Indeed, income inequalities have widened, and despite the growing inequalities the UPA government has lent its weight to the rich and powerful, thereby further intensifying disparities. The most visible markers of inequality have come from the interaction between the state and capital in sectors like mining, infrastructure and land, where it is not free enterprise but a pattern of corrupt state-business relations that have sharpened inequality.

 

What makes these conflicts significant is that they are taking place against the backdrop of an intensely money-driven political process, evident from the very large number of entrepreneur-politicians, wealthy MPs and, at the apex, cabinet ministers operating with the backing of a state-business alliance. When parties and candidates spend huge amounts of money to win elections, they are prone to favour business groups which is where the money is. Every succeeding Parliament contains an increasing number of members from the moneyed echelons of society, with the current Parliament assuming the character of an exclusive club of millionaires and multi-millionaires. The substantive issue is undue favours given to businessmen who are exploiting their proximity to power-wielders for personal gain.

As India continues to liberalize controls on capital and privatize resources, there is a corresponding increase in corruption and further growth of the politics-business nexus. Until the anti-corruption campaign hit the streets and the Supreme Court intervened to investigate the allocation of 2G spectrum, there was scarcely any debate on the special influence that business groups command in the state.

 

Corruption and manipulation of the state as a means of accumulation have always existed, but the scale and ubiquity of corruption even at the highest levels of the polity and economy has given rise to crony capitalism becoming an integral part of India’s strongly corporate-led growth, with a massive increase in the ratio of profits and interest to GDP determined by the use of state power to extract resources and surpluses. In the cases of the Commonwealth Games, the 2G spectrum, or the coal scams, the UPA government created problems for itself by mishandling the issues and shielding corrupt ministers.⁷ Later, by sacking some of its own leaders, it tried to retrieve lost ground with an urban middle class disillusioned with its inaction on mega-scams. The party has not, however, been able to stop the stain of corruption from spreading at a time when high-level corruption has become an important issue in Indian politics.

 

The India Against Corruption (IAC) campaign emanating from civil society has exposed the underbelly of Indian politics. The botched arrest of activist Anna Hazare in August 2011 rapidly snowballed into spontaneous protests and a popular movement against corruption across the country. It shook the Congress and showed that the UPA was completely out of sync with public sentiment. The fiasco over the Lokpal Bill in the Rajya Sabha further underscored the confusion and lack of political will to fight corruption. Civil society campaigns frequently have an anti-party tone, and ‘outsiders’ like Arvind Kejriwal, with little political experience, are causing territorial anxieties in all political quarters. The continuous expose of corruption in high places has severely damaged the credibility of the government and the top leadership. These scams have stuck to the Congress because it has been willing to defend the inexplicable wealth of a chosen few. It is largely because of these difficulties that Congress support has dissipated.

Finally, parliamentary democracy in the proper sense of the term has not been working well for the past two years. All political parties are complicit in the impasse but none more that the BJP. The BJP’s obstructionism has added to the deadlock and brought law and policy making to a virtual standstill. The principal opposition party believes that the only means of deposing the government is a paralyzed Parliament, and in consequence we have seen parliamentary sessions getting washed out time after time, blocking important legislative business, including the Lokpal bill. In every session the BJP comes up with an inflexible demand, which mysteriously disappears once the session concludes, giving way to the next reason for stalling the proceedings of the House.

The parliamentary mechanism of the no-confidence motion is available but not found useful, as the opposition does not have the numbers to ensure the fall of the government on the floor of the House. Therefore, the BJP decided to stall Parliament from functioning altogether. Actually, Arun Jaitley, the Leader of the Opposition in the Rajya Sabha, has redefined the meaning of parliamentary work by arguing that the instrument of disrupting parliamentary proceedings is a legitimate weapon in the arsenal of the opposition through which a government is made accountable. In other words, it is too much for people to look to Parliament for discussion, debate and legislation on pressing issues because disruption is an indispensable tool for course correction and for making the government accountable; therefore debate can wait, and in any event vigorous debates are taking place in TV studios if not in Parliament.

 

Rahul Gandhi taking charge of the Congress’s election campaign in 2014 marks an important moment of transition, indicating a formal shift of power in the party. Rahul Gandhi formally assuming a more powerful position has, however, to be seen alongside the recent announcement of the second round of economic reforms. Giving up on its strategy of reform by stealth, for the first time in eight years the Congress Working Committee (CWC) declared clear support for the government’s reform agenda in the belief that it will generate dynamism in the economy and provide funds for the UPA’s pro-poor programmes.⁸ Economic reforms are needed to attract foreign capital and support ‘economic growth’, which Prime Minister Manmohan Singh asserts ‘is the only way to liberate crores from poverty.’ The rally organized by the Congress at Ramlila Maidan on 4 November 2012 to publicly support the liberalization agenda signals an ideological turning point for its politics. It is a clear signal that the party is prepared to own economic reforms in contrast to the earlier impression that it was at odds with the government’s reform agenda.

 

During UPA-1, Sonia Gandhi had been quick to oppose FDI in retail, raising diesel prices, and limiting cooking gas subsidies, while now she is focused on explaining the benefits of FDI in retail and the difficult decisions the government is required to take to revive growth. Her onstage endorsement of the prime minister’s economic road map suggests that the neo-liberals have been able to convince the leadership that reform measures, such as FDI in retail and liberalization of insurance and pension funds, are the only way out of the economic slowdown and to deliver a new round of prosperity. Rahul Gandhi’s speech went a step further. Both at Ramlila Maidan and the Surajkund conclave of his party on 10 November, he buttressed economic reforms, claiming that the Congress as a party of change has ushered in paradigm shifts from bank nationalization to liberalization which has been good for the country, and the new round of reforms will similarly promote the national interest.

This curious shift is puzzling because it is not economic growth but the goodwill generated by the rural employment guarantee scheme and social sector programmes that helped the party to win in 2009 with a larger plurality than had been anticipated. Nevertheless, the political leadership remains convinced that the economic crisis is a consequence of global conditions and the absence of adequate reform, and not structural imbalances in the economy which too may be responsible for the slowdown.⁹ It has lost support since it has failed to deliver either on growth or welfare and, therefore, hopes to recompense its dwindling social base through economic reform which can win over the middle classes and kick-start growth without which the government will not have the revenue to promote social welfare.

 

The UPA-2 government is seeking to balance economic reforms through an ambitious scheme of direct cash transfer of benefits and subsidies to the poor. Described by government spokesmen as a game-changer, the scheme aims to distribute income benefits of 29 welfare schemes operated by different ministries to the poor. It will transfer directly the subsidy amount for special purpose or for use in areas such as education and healthcare to the bank accounts of millions of end-users through Aadhaar-enabled bank accounts in 51 districts spread over 16 states and by the end of 2013 to the entire country. It remains to be seen whether this will politically benefit the Congress or harm it, but if cash transfers substitute social entitlements it will have a devastating impact on the lives of the marginalized who are dependent on the Public Distribution System (PDS) and other forms of entitlements in health and education.

In any event, the social policy driven political turnaround from 2004 took place without any organizational change and restructuring of the Congress party, which raises serious doubts about its sustainability. As a mass party centred on political leadership, it has not paid much attention to its organizational structure, which has remained weak and ineffective. Restructuring the organization is essential, but in order to do this Sonia Gandhi has to remove the dysfunctional elements through internal elections and bring in a new set of activists and cadres. The top leadership is, however, cautious and, therefore, not prepared to clean up and reorganize the party.

 

Rahul Gandhi has stated his intention to rebuild the party at the grassroots level and promote young leaders from the ranks of the Youth Congress. However, his well-meaning experiments in party democracy have been in vain; in point of fact, it has diverted him from working for the larger goal of transforming the party. The party’s disastrous performance in Bihar (2010) and Uttar Pradesh (2012) Assembly elections do raise questions about the rhetoric of party restructuring. In 2006, Rahul Gandhi spoke about the party’s problems in Uttar Pradesh where it had become weak and pointed out that the failure was organizational rather than political. ‘We have failed because we lost that ability by which we could bring forward the true worker of the Congress,’ he said, asking the party to give ‘the anonymous mass of workers’, a ‘voice in the organization’.¹⁰

Even Sonia Gandhi highlighted the weak organizational structure as the principal reason for the dismal performance in Uttar Pradesh. While the leadership blames the absence of an effective regional party structure when it loses the polls, it undermines that very organization when it wins, as popular leaders are denied an opportunity to head the government despite the backing of a majority of MLAs – the Uttarakhand leadership controversy in March 2012 being the most recent example of this undemocratic approach.

 

The United Progressive Alliance-2 must grasp the opportunity to recoup the political capital that UPA-1 had earned. However, with time running out, the UPA government, given its lack of credibility and a party hamstrung by corruption scandals and sharply declining electoral prospects in the states, will find it difficult to overcome the current political crisis. It tried to fend off the suspicion that the government has lost its capacity to govern by demonstrating that the prime minister and the party president are on the same page on reforms. Exhibiting unity on reforms might please the business elite but the road ahead is shaky unless the Congress sets its own house in order and the government and the party are able to move ahead with crucial legislation such as food security and the Lokpal and other social policies that would help improve the conditions of the marginalized.

This requires a forceful political leadership that can listen and respond to the voices from the grassroots and civil society, and assimilate them democratically into the party’s organizational system and governance structures which is just not happening under the present dispensation. The aam aadmi and their concerns with regard to inflation, livelihoods, and equity and justice must be allowed to stage a comeback. This is the constituency that had helped the Congress to inflict a defeat on the NDA but it is increasingly on the sidelines as the party showers attention and favours on big business and the middle classes in the mistaken belief that the latter can decisively influence voting behaviour in 2014.

 

Footnotes:

1. Zoya Hasan, Congress After Indira: Policy, Power, Political Change 1984-2009. Oxford University Press, New Delhi, 2012.

2. See, for example, Prem Shankar Jha, ‘Why the Government is Paralyzed’, The Hindu, 23 July 2012.

3. Interview of Raghuram Rajan, economic advisor in the finance ministry, ‘India Shouldn’t Look Like the Weakest BRIC in the Wall’, The Hindu, 27 September 2012.

4. A recent example signalling these fears is its retreat on the question of adopting General Anti-Avoidance Rules (GAAR) to prevent abuse of the provisions in the law to ‘legally’ avoid tax payment resulting in private gains not in keeping with the law.

5. Praful Bidwai, ‘A Dismal Third Anniversary for UPA-2’, Rediff News, 12 May 2012.

6. The numbers and wealth of billionaires has risen dramatically for a relatively poor country, and many feel marginalized from the growth that has occurred. Aditi Gandhi and Michael Walton, ‘Where do India’s Billionaires Get Their Wealth’, Economic and Political Weekly, 6 October 2012.

7. ‘Coal for a Song’, Economic and Political Weekly, 14 July 2012.

8. Smita Gupta, ‘CWC Backs Reforms But Questions Raised on Timing, Need’, The Hindu, 26 September 2012.

9. C.P. Chandrasekhar, ‘Lost in Transition’, Frontline, 30 November 2012.

10. Quoted in Hartosh Singh Bal, ‘Ruin of the Congress’, Open, 29 September 2012.