The market economy is the BJP's Achilles heel

By M H Ahssan

It is received wisdom that no one has won or lost an election on economic issues. This is the assumption among those who are in the political pit as well as those who are writing about the election scene, which is agog with alliances made and unmade. But there is a catch there. It is that while the economy may purportedly be a non-issue -- which too needs to be debated a little more closely -- it returns to haunt those who win the election. Now, the grave challenge before any government that emerges after May 16 is that of tackling the economy, which is in real trouble.

The magnitude of the malaise can be calibrated differently by the various interests. Industry and business believe it is very bad and that government must do all it can to help revive a potentially deflating market. The Congress is not too sure things are that bad and that the challenge of a contracting economy can be handled. The middle parties , SP, RJD, BSP, NCP, TDP, DMK, AIADMK, do not much care for the economy as a political issue as they believe that it is not something that connects with their voters.

On the other hand, the ideology-bound communists and the BJP have a serious problem on their hands. They have to state their position with regard to the raging market cyclone. The communists say that the failure of the market vindicates their stand against capitalism in general, and the particular variant of neo-liberal economics of the last quarter century. They stand on weak ground as they are themselves mired in the debris of failed communism/socialism.

The case with the BJP is different. As a right-wing party, it is at a particular disadvantage. It is not just that the market is in a mess, but that it requires the intervention of the state to sort it out. But what troubles right-wing parties elsewhere in the world do not affect the BJP. This is for two reasons. First, the BJP is confused as to what kind of a right-wing party it is. It certainly does not believe in the libertarian credo of the traditional right-wing parties like the Republicans in the US, the Conservatives in Britain. When asked to defend the freedom of the individual -- in the economic as much as in the political sphere -- and the demands of the state, Republicans and Conservatives do not hesitate to stand up for the individual and against the state. The BJP is an ultra-statist party, in spite of its opposition to nationalisation of industry and doctrinaire socialism. It favours the state against the individual.

The BJP is likely to support and guide the private sector for the greater glory of the nation in the manner of governments in Japan and South Korea. They believe in a market economy which works for the state, as it were. The weakness of the Japanese and South Korean economies is due to the unholy alliance between the state and captains of industry. This is also a position that is not fully acceptable to the burgeoning middle class in India. India's market participants love to unleash their individualist energies, and it is not confined to the economy.

More importantly, BJP's leaders have not yet come to terms with the economic crisis. They blame the Congress-led UPA government for the economy's woes. It might work during election campaign but not beyond. The BJP's economy pundits are at sea about what is to be done, except for the vague notion that India must grab the opportunity to become a leader of the world economy. But those engaged in this rhetoric have few suggestions as to how make it happen.

The BJP cannot hope to live off the Hindutva rhetoric and extend it to the economy as well. The economy needs an enlightened and an innovative approach. That needs a bit of hard thinking, and the party has no stomach for it. Whatever the outcome of this election, the BJP will have to articulate to itself and to the country its ideas about the economy. At the end of the day, parties in power will have to position themselves correctly with regard to the economy.