- EC has no legal sanction, only moral pressure to stop any populist policy
- In case of policy in the public interest, the government can approach EC for approval
- EC panel studies and takes decisions on a case-by-case basis within a couple of days
- Political opposition can delay timely action if there's no consensus
***
"The EC won't come in the way of genuine policy decisions. But last minute sops...no."
-J.M. Lyngdoh, Former CEC
"The UPA has enough time before the code is in place. I wouldn't agree on exceptions."
-Yashwant Sinha, Former FM, BJP
"The code cannot stop the government from carrying out necessary, beneficial measures."
-U.K. Sinha, CMD, UTI Asset Mgmt
"The EC can't oppose urgent economic reforms which are in the nation's interest."
-K.K. Venugopal, Senior Advocate
***
Even in the best of times, elections don't go down well with the economy. Everyone waits for the heat and dust to settle, policy slips into cold storage and the economy goes into auto-pilot mode. But as the 2009 general elections approach, things are far worse. The Indian economy is not in the pink of health and with the global picture uncertain, business and consumer mood at home remains downbeat. Calls for bailouts, relief packages and stimulus measures are increasing by the day as the government scrambles to react to wave after wave of bad tidings.
Officially, the UPA government's term is till the third week of May '09, but it looks like elections will come one month earlier. Once the Election Commission announces the dates, the model code of conduct for political parties and candidates kicks in. In sum, for a period of 45 days before elections, the government can't promise any financial grants or projects—and make any major policy changes.
This not only reduces the time available to PM-cum-FM Manmohan Singh to craft measures to boost demand, the code could also tie his hands if there is a severe economic crisis. What if, for instance, the textile industry—which employs the largest number of workers—goes into free-fall? Even if faced with a calamitous situation, will the government have to defer action till a new regime is in place? Can the government not take any policy measures during the 45 days of run-up to the elections?
These are questions that chief election commissioner (CEC) N. Gopalaswami declined to answer. Similarly, T.N. Seshan, former CEC, admitted to having "strong views" but was averse to sharing them. But J.M. Lyngdoh, who's also held the post, asserts, "The EC isn't daft enough to come in the way of genuine policy decisions provided they are not last- minute sops to win votes." In fact, the view that the EC "cannot hold up policy announcements for the country" has an echo within the electoral establishment.
But there's also ambiguity, thanks to the caveat that "each issue has to be viewed in its entirety". Ultimately, it all boils down to the three election commissioners who vote on the matter. "The EC is too strict in its interpretation of what can and cannot be announced before an election. In a fast-moving world, this is ridiculous," says Pratap Bhanu Mehta of the Centre for Policy Research. He feels there has to be a formal distinction between unduly influencing voters and policy pronouncements.
Constitutional experts agree the code "is nebulous" (it has been amended several times since being framed in 1991)—which is why it comes down to the vote. What doesn't help is the surcharged political environment on the eve of elections. That's the big concern for industry, which feels the consequences of inaction could be a further slowdown of the economy. Rajya Sabha member Rajeev Chandrashekhar warns, "In an economy beset with a crisis of this magnitude, a 45-day vacuum could prove to be dangerous."
India Inc clearly needs a leg up, and often points to the hard economic choices the transition government in the US is dealing with. Reassuringly, institutions like the RBI will be at work. "In no way does the code stop the government from carrying out measures that are necessary and benefit a larger section of the population," avers U.K. Sinha, CMD of UTI Asset Management. But all measures will have to pass the test. Ex-chairman of Canara Bank M.B.N. Rao recalls how the EC allowed the bank's promotional programme in an election-bound city only after it was convinced no single political party would benefit.
Experts recommend a consensus approach to pre-empt any political stalemate. To cite a case: during the recent assembly elections, though the EC gave the go-ahead for a cut in prices of diesel and petrol in "the national interest", the government deferred action. It also held back announcement of a stimulus package till the election process was over in five states, indicating a political decision.
Citing a similar policy vacuum during his tenure as finance minister in 1991, the BJP's Yashwant Sinha says "even during those difficult days no concession was made and we abided by the code". He also makes the BJP's stand very clear. "I would not agree to any exception especially when the government and everyone knows what is the likely scenario," says he, adding that the UPA will have "enough time" to take economic measures before the code is in place.
In an era when consensus eludes the government even during normal times, battlelines will be drawn during elections. Clearly, it's the EC that will have to take the call. According to former law minister Shanti Bhushan, "The code has no legal sanction. It is only used with a view to ensuring free and fair elections." Though autonomous, the EC is as much under the Supreme Court's jurisdiction as any other authority.
While there have been instances where the SC has overturned the EC verdict, rarely do political parties go to the courts during elections. Senior advocate K.K. Venugopal adds, "The EC cannot stand in the way of government bringing about urgent economic reforms in the interest of the nation."
Fortunately, the EC doesn't work with the same snail's pace as normal government machinery, says Lyngdoh. More importantly, "you know when the government is being cute", he adds. Given the politics at play, however, it makes sense for the government to act while there is still time and opportunity. So everyone, keep your fingers crossed.
