August 04, 2021
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Left Is Right?

No, the Left is wrong and the Right is right as far as economics goes, right? Left. Sorry, wrong. Surprised, shocked, numbed? Take a closer look. The economic ideology of the right and the left is converging, the twain have met...

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Left Is Right?

I have heard this a thousand times: that the Rightwing parties (like BJP) are pro-reforms, and the Left is against them. Recent events seem to prove this assumption. Ever since the Congress-led UPA regime has come to power, the Left parties have ensured that the disinvestment ministry was scrapped, threatened to campaign against the proposed increase in FDI (foreign direct investment) caps in sectors like telecom and aviation, and opposed the decision to cut the interest rate on EPF (employees provident fund).

In comparison, the previous NDA government ran along the reforms path. It cut import duties beyond anyone's imagination just before the previous national elections, it privatised ports and airports and, most importantly, the pro-reforms torch-bearer, the former disinvestment minister, Arun Shourie, left no stones unturned to sell off PSUs and raised an unbelievable Rs 16,000 crore in a single year (2003-04)!

There can be no debate on who's right, and who's not, as far as economic policies are concerned. Right?

Left. Sorry, wrong.

Surprised, shocked, numbed? Take a closer look.

You will find that the stance taken by both the BJP and the Left parties on important policy issues has been the same. In fact, the decisions taken by the previous NDA mirror the demands made by the CPI and the CPI(M). Be it FDI, disinvestment, EPF rates or labour reforms, the two ideologies have converged - as if their agendas have historically been the same.

I'll start with NDA's success story: PSU privatisation. Shourie emerged as the champion-reformer who fought, bickered, threw tantrums, blackmailed, even threatened (to resign) in a bid to push through the sale of government's stakes in PSUs. He achieved considerable success in the form of both strategic sales (to a single private entity) and public ones (through the stockmarket route).

But in the last two years of NDA rule, Shourie couldn't effect a single strategic sale. Given the opposition within his party and from BJP's ideologue wings (like the Swadeshi Jagran Manch and the RSS), and due to the Supreme Court order that virtually halted the sale of any PSU that had been set up under a Parliamentary statute, our champion could only sell the government stakes through the stockmarket (and the initial public offering) route.

All this after screaming from the rooftops that strategic sale was the only efficient, viable and effective manner to sell the state-owned companies! What he achieved in the last two years as the disinvestment minister was something that no expert will term as "privatisation" or "disinvestment".

Still, is that different from what the Left parties, as supporters of the UPA government, have agreed to?

Not at all. After repeatedly claiming that "we will not sell profitable PSUs" and scrapping the disinvestment ministry, the UPA has decided to go ahead with public (or market) sales. Exactly on the lines of what Shourie did with GAIL, ONGC and others. So, one can expect a few IPOs and public issues, the first being the NTPC one in the near future.

If this was not enough, Shourie showed a distinct anti-reforms streak on the issue of increasing the existing FDI caps in telecom and aviation. The reformers' reformer, as part of the cabinet committee on economic affairs (CCEA), opposed the move on "security" grounds. Not once, not twice, but several times. He was single-handedly responsible for the postponement of the decision during the NDA tenure.

So, what's wrong if the Left parties too are opposing the UPA's finance minister P. Chidambaram's decision to increase the caps? And the reasons the Left is citing are the same as Shourie's. Well, the twain (left and right) do meet several times.

Let's get away from Shourie, and focus on what the NDA did on the critical issues like labour reforms. Remember that the BJP's leaders have constantly harped on second-generation reforms, of which labour was the most important. But during its entire six years, the NDA didn't move an inch. Labour reforms were consistently, and constantly, put on the back burner.

At least, the Left parties are consistent. They have always opposed labour reforms. They don't speak one language publicly, and do something totally different in private. They don't mince words when talking about issues like disinvestment and labour reforms.

Before I am accused of being a Leftist, anti-reforms, and anti-BJP, let me give another example. For years, as interest rates in India have plunged, the NDA's finance and labour ministers maintained that it was imperative to reduce the EPF rates. Not merely to keep the latter in tandem with general rates, but also to reduce the losses being incurred in the provident fund account, as it was investing in securities that yielded lower interest than what it was paying the account holders.

For years, the NDA kept threatening to reduce the EPF rate, but didn't have the political will to do it. Obviously, the BJP-led government didn't wish to hurt the interests of its key vote bank, the Bharatiya Mazdoor Sangh (BMS), a powerful trade union that owes allegiance to the Sangh parivar. Nor did it wish to ruffle feathers among the vast section of blue-collar workers who may not be part of the BMS.

If there's nothing wrong with what the BJP (or NDA) was doing, then there's nothing wrong with the Left opposing the EPF cut. After all, the workers class and the trade unions are among the key supporters of the Left parties. And the CPI or the CPI(M) can't afford to lose their support.

It's true that the reasons for this convergence of ideologies are different and that the compulsions of the Left are different from that of the Right. One is bogged down by intellectual history, the other by "nationalistic" mindset. One by proletariat politics, the other by swadeshi socialism. One by the angst of the powerless, the other by the desire to be a superpower. However, the end result is the same: end of economics.

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