If television anchors, newspaper headline writers and commentators were to participate in the rapid fire round on Koffee with Karan, and are asked about the first thing that comes to their mind when he says 'anarchy', almost everyone will probably say AAP (Aam Aadmi Party).
Why else will all of them assume that the President's comment on 'populist anarchy' in his Republic Day address to the nation is a reference to AAP?
Most political parties have gone along with this interpretation and welcomed the President's remarks.
But consider what Pranab Mukherjee said just before bemoaning populist anarchy : "Elections do not give any person the licence to flirt with illusions. Those who seek the trust of voters must promise only what is possible. Government is not a charity shop. Populist anarchy cannot be a substitute for governance." This does not seem like a criticism of the activist politics of AAP.
What could be more likely is that the former finance minister was red-flagging the fiscal anarchy – driven by populist politics – that is almost certain to set in across the country as election fever hots up. Political parties will say they do deliver the goodies they promise during elections and so there is no question of misleading voters, but the question is – will it be fiscally possible to do so?
Was it really AAP that
Why do we assume that those words were not directed at the UPA government whose fiscal profligacy has put enormous strain on the exchequer (apart, of course, from the fact that Mukherjee was finance minister in that very government till he moved to Rashtrapati Bhavan)?
There is little evidence that the UPA is reforming its spendthrift ways. This week, in all likelihood, the ceiling on subsidised LPG cylinders will be raised from nine to 12, increasing the petroleum subsidy bill by around Rs 4000 crore, according to some estimates, all because Rahul Gandhi demanded it. This despite clear indications that 90 per cent of LPG consumers use only nine cylinders a year.
The ceiling that was originally proposed when the cap was introduced was six, but was later raised to nine under political pressure. That itself entailed an additional burden of around Rs 9,000 crore.
One of the first things the UPA did when it came to power the first time in 2004 was to reverse the previous government's decision to free the pricing of some petroleum products from government control. During the last years of the National Democratic Alliance regime, regular increases in petrol prices did take place.
The UPA not only stopped this but also sat on decisions to hike prices even when international prices were galloping northwards. It is only in the past two years that it has allowed market-based pricing. But the damage has been done. The petroleum subsidy bill has ballooned and, in 2012-13, accounted for 37 pe cent of the subsidy bill, against 32 percent in the case of food subsidies.
In Budget 2013-14, the overall subsidy bill was pitched to fall by 10 percent and the petroleum subsidy bill by 32 percent. Will that target now be met? Is this not populist fiscal anarchy?
Why could Mukherjee's words not have been directed at the Maharashtra government which recently cut power tariffs by 20 percent for industrial, agricultural and commercial customers (though households consuming less than 300 units a month will also benefit)? This is expected to result in a shortfall of over Rs 700 crore for the state power distribution firm. The tab will be picked up by the state government (Rs 600 crore) and the state power generation and transmission companies (Rs 100 crore).
The tariff cut did not apply to Mumbai and its suburbs, where private firms supply power. So Congress MP Sanjay Nirupam went on a hunger strike and even threatened to immolate himself if tariffs were not reduced there as well.
He's called off his fast after chief minister Prithviraj Chavan, who has been saying that he too felt the need for a cut, gave an assurance that he would look into the matter. If the power regulator does not oblige with a tariff cut, will the state government chip in with yet another subsidy? Can the state exchequer bear the burden? And even if it can for now, is it wise to spend money on subsidies instead of investing in power for the future?
But let's not only blame the Congress for fiscally irresponsible behaviour. The BJP's prime ministerial candidate may have hit out at the Congress reliance on doles, but his party is not above economically unwise actions. Let's not forget that a key promise in his party's campaign during the Delhi elections was to cut power tariffs. When tariffs are set by an independent regulator, the only way governments can cut them are by giving subsidies out of the exchequer.
In the run-up to the elections, one can only expect more competitive populism, not less, from all political parties. Most states have a revenue surplus now, but is it fair to borrow from the future, without putting in place sound policies to put back what one has taken? Assuming Mukherjee was criticising AAP is shying away from the truth. The truth is that the country cannot afford populist fiscal anarchy. It is time every political party heeds that.
Seetha is a senior journalist and author
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