The UPA Government came to power in 2004 riding on the anger of the people against the communal and neo-liberal policies of the NDA Government. The UPA Government after coming to power declared that it will cater to the aam admi by adhering to the National Common Minimum Program (NCMP). The NCMP as a document was a compromise of sorts with neo-liberal economic policies pursued in India, while not making a complete break from neo-liberal policy making. However, the last 5 years have proved that a leopard does not change its spots and the Congress led UPA Government was totally committed to the neo-liberal policy regime and did very little for the upliftment of the aam admi.
Adhering to Neo-Liberalism: FRBM Act and Declining Fiscal Deficit
Neo-liberalism entails an economic philosophy where the state rescinds its role of catering to the interests of the people under its jurisdiction and transforms itself into an instrument of promoting the interests of global finance capital. This essentially at the policy level takes the form of an expenditure cut on the part of the state under the diktats of finance capital. In our country this expenditure cut has been given a legal status under the Fiscal Responsibility and Budget Management (FRBM) Act, which limits the fiscal deficit (difference between Government’s expenditure and taxes) to only 3% of GDP. This Act was passed by the NDA Government but the UPA Government too with its basic thrust in favour of neo-liberalism embraced it. As a result, during the UPA regime, the fiscal deficit continued to decline from 4.5% in 2003-04 to 2.7% in 2007-08. In 2008-09 as a result of the financial crisis and revenue deficit of the Government increasing, the fiscal deficit has shot up to 6% of GDP, which however is estimated to continue its declining trend from next year, with a commitment that the FRBM targets will be adhered to in the near future. (Budget Speech of Finance Minister, 2009-10).
Declining Development Expenditure
This declining fiscal deficit essentially means a decline in the expenditure of the Government. Now, within this expenditure of the Government, there are fixed expenditures like salaries and wages to the Government employees, (which has increased recently due to the 6th pay commission), interest payments and administrative costs of the Government. So if the Government decides to decrease its expenditure then this essentially means, given the fixed part of its expenses, a decline in the Government’s development expenditure. Therefore, it is not surprising that the expenditure of the UPA Government as a proportion of GDP, has actually declined from 7.09% in 2003-04 to 6.17% in 2006-07 and then marginally increased to 6.76% in 2007-08. (Handbook of Statistics on the Indian Economy, RBI) In other words, as a result of the basic adherence of the UPA Government to the policies of neo-liberalism, it has actually decreased the expenditure on development, as a proportion to GDP, which is most important for the aam admi. This declining expenditure on development has taken a huge toll, particularly, on education and health in India.
Expenditure on Education and Health: A Far Cry from NCMP
Education
Increasing Public spending on education to at least 6% of GDP was a key commitment made in the NCMP. Far from increasing the public spending on education, there has actually been a decline in the expenditure GDP ratio from 3.94 to 3.24% of GDP between 2000-01 and 2006-07 (taking into account expenditure by all government departments on education). Within this, the share of the central Government has marginally increased from 0.48% to 0.75% of GDP. This abysmal level of expenditure on education in India is even less than countries like Tunisia, Jamaica, Maldives and even less than the Occupied Territories of Palestine. (Source: Human Development Report 2007-08). This is a terrible and shameful state of affairs in the country, which the UPA has done very little to overcome. It is shameful that the UPA Government has actually reduced the allocation for the Sarva Shiksha Abhiyaan (SSA) since 2007-08. In 2007-08, the total allocation for this scheme was Rs 12020.2 crore, which has decreased to Rs 11933 crore in the interim budget of 2009-10. This fact alone speaks volume about the UPA Government’s commitment towards universalizing education in the country.
In the face of this refusal by the Government to increase expenditure on education, what has happened is that private players have come in a big way in the education sector both in Primary as well as Higher education. The share of private unaided higher education institutions increased from 42.6% in 2001 to 63.21% in 2006. (Source: XI Five Year Plan, Vol. 2). The UPA Government has declined from enacting any legislation to control the fees and admissions in the private education sector. Therefore, what has essentially happened is that far from spending 6% of GDP in education, the UPA Government has decreased the expenditure and catered to the interests of private education providers, who are anything but the aam admi.
Health
The aam admi in India is basically unhealthy because of the complete apathy on the part of the Government to increase allocation in the health sector. According to the National Family Health Survey (NFHS)-3,
46% of children below 3 years of age were under weight
Percentage of anemic children between 6-35 months increased to 79.2% in 2005-06, from 74.2 in 1996-97. Percentage of anemic married women increased to 56.2% in 2005-06, from 51.8 in 1996-97. Percentage of pregnant women who were anemic increased to 57.9% in 2005-06, from 49.7% in 1996-97. In other words, there has been a drastic increase in anemic persons in the population.
This reflects a decrease in the nutritional intakes of the population. In 2004-05, the average calorie intake in rural and urban areas was 2047 and 2020 Kcal respectively, which decreased from 2153 and 2071 Kcal respectively.
In the face of such glaring deficiencies in the health of the population, it was imperative that the Government increase its expenditure on health significantly to at least 2-3% of GDP, as promised in the NCMP. However, it is seen that the expenditure on health in the country was only 1.02% of GDP with the centre contributing only 0.34% of GDP. Such low level of public expenditure on GDP is amongst the lowest in the world. As a result of this abysmal level of public expenditure on education, the number of functioning Primary Health Care centres in the country decreased from 22842 in 2001 to 22370 in 2007. Percentage of vacant doctor posts in the Primary Health Centre has also increased from 13.36% in 2001 to 18.04% in 2007. (Source: How the UPA Spend Our Money, CBGA). In other words, under the UPA Government the aam admi could find less number of primary health care centres in his/her vicinity and even when s/he could find one, the probability of not finding a doctor in the health centre actually increased.
Agriculture
One of the main reasons for the defeat of the NDA Government in 2004 was the acute agrarian crisis in the country. In the NCMP, the UPA Government promised to improve the agrarian situation in the country. The reality after five years is however far from what the UPA Government promised.
Large number of farmers continued to commit suicides even after the UPA came to power. In the year 2006, 17060 farmers committed suicide which was slightly lower than 17131 farmers who committed suicide in 2005. In 2007, as many as 16632 farmers committed suicide. (Source: http://www.counterpunch.org/sainath02122009.html). The farmers committing suicide in such large numbers only show that the extent of agrarian crisis did not subside with the UPA coming to power.
In order to address this issue of growing agrarian distress and farmers’ suicide, the Government in the budget of 2008-09 announced debt waiver scheme for the farmers. While the debt waiver came too late, it had its own problems also. Firstly, there was no scheme announced to waive the loans of the farmers taken from private money lenders which constitute bulk of the loans of the farmers. Secondly, the uniform cut-off of two hectares discriminated against dry land, as against wetland, farmers since the plot sizes of dry land farmers are comparatively larger; indeed this uniform cut-off may even leave out large segments of the peasantry in crisis-hit regions like Vidarbha.
At the same time, there are other serious issues pertaining to agriculture in terms of a falling per capita availability of food grains. It is noteworthy that the per capita availability of food grains continued to decline under the UPA Government from 168.9 Kg per capita per annum in 2004 to 160.4 Kg per capita per annum in 2007. This is basically a reflection of growing problem of food security in the country which has been compounded by the reluctance of the UPA to universalize the Public Distribution System. Moreover, the total allocation on food security decreased from 1.16% of GDP in 2004-05 to 1.12% in 2008-09. (Source: How the UPA Spend Our Money, CBGA). All this points to the fact that under the UPA, it has become difficult for the population to access food in the country. This is indeed a travesty of the UPA commitment towards improving the conditions of the aam admi.
Price Rise
After many years, the country reeled under double digit inflation rate under the UPA Government. This inflation was a result of the denial of the UPA to come out of the neo-liberal paradigm and strengthen the Public Distribution System and ban futures trading in essential commodities. Moreover, the UPA’s stubborn refusal to cut the excise duties on petroleum products also increased the price of petrol and diesel in the country. The sky rocketing price rise has subsided now, only with the advent of recessionary trends in the Indian economy as a result of the global economic crisis.
Denial Mode on Economic Crisis
Ever since the economic crisis hit the world and India, the UPA Government has been on a denial mode. Firstly, they claimed that India was insulated from the crisis, which was completely false as the data of the Indian economy showed the imminent slow down and job losses in the economy. Even then, the basic policy thrust of the UPA continued to be neo-liberal and market oriented when the entire world, particularly the advanced capitalist countries, were falling back upon public investment and Keynesian measures to reverse the global recessionary trend. This is most evident in the fact that the UPA Government announced its decision of increasing the FDI ceiling in the insurance sector when the entire world was in a financial crisis, which spread precisely because of such policies aimed at opening up the financial sector.
Secondly, the response of the UPA Government to deal with the crisis is grossly inadequate. The basic thrust of the UPA has been in terms of announcing tax cuts and interest rate cuts in the economy aimed at luring the people to spend more thereby increasing demand. However, in times of recession when the confidence on the economy is low, such tax and interest rate cuts does not increase demand, simply because the public hold on to their cash balances and do not spend more in anticipation of an uncertain and bleak future. What was needed was direct investment and demand injection on the part of the Government. In this regard the UPA only announced a direct fiscal stimulus which was only 0.5% of India’s GDP, which was a paltry sum compared to the enormity of the crisis. As a result of the UPA’s reluctance to deal with the crisis, lakhs of people have lost their jobs and many had to suffer pay cuts. In other words, the ideological commitment of the UPA towards neo-liberalism continues while the aam admi suffers.
Conclusion
The policies of the UPA Government led by the Congress party are clearly enmeshed within the overall contours of anti-people neo-liberalism benefiting the rich at the cost of the aam admi. It is time to defeat the forces of neo-liberalism and rally behind an alternative set of pro-people policies which can be provided only by an alternative political formation led by the Left. The need of the hour is to defeat the communal BJP led NDA as well as the UPA and fight for a secular, democratic and pro-people political alternative to the BJP and the Congress.
