The economics that drives the politics of Raj Thackeray

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The economics that drives the politics of Raj Thackeray

Draw a line between Chennai and Chandigarh. Seven out of the eight IPL cricket teams are on the line or to the 'Right' of this line. The only team that is to the 'Left' of this line, expectedly, is the Kolkatta team. And when the IPL will be expanded in the following seasons, one can readily think of teams from Ahmedabad, Nagpur, Goa, Kochi or perhaps Vadodara - all to the 'Right' of my imaginary line.

But to conceive of an IPL team from say Lucknow or Patna or Bhubaneswar - all to the 'Left' of my line even after ten years from now is as remote as snow in Chennai. The reference to IPL teams, at the outset, is to merely sensitise the reader to the issue on hand - growing regional (economic) disparity and its impact on national politics. After all, sport is an index of prosperity, isn't it?

While India had grown for the past three decades at approximately six per cent per annum, states like Gujarat, Tamil Nadu and Maharashtra which are to the 'Right' of this line grew much faster rate than the national average. In contrast, states like Bihar, UP and Bengal - those on the 'Left' of this line grew lower than the national average. In the process, they did pull down the national average substantially.

What is interesting to note here is that in contrast to the 'North-South' divide as propounded by Raj Thacakery and his brand of politics, this is an 'East-West' problem or better still a 'Right-Left' problem.

Economists point out that this regional disparity has reached a stage where the per capita income of Punjab is five times that of say Bihar. No wonder , out of the 150 Naxal hit districts of the country, constituting about 25 per cent of all districts in the country, virtually each one of them are to the 'Left' of my imaginary line.

This is not limited to income alone. On social indices like health, education and infant mortality, a state like Gujarat which seems to have caught up with at-least the South East Asia is no match for a state like say Bengal or Orissa.

The lower growth rate in 'Left' India, the relatively poorer quality of governance, the appalling state of infrastructure, social indices that match sub-Saharan Africa, growing Naxal menace leading to severe law and order problems have lead to the inevitable and consequential migration of people from these place to the other parts of the country.

It is the failure of policy framers to address the regional disparity that is providing fuel to the politics of Raj Thacakery and his ilk. Raj is clearly wrong in his choice of words, expressions and actions. Similarly, by mixing culture perhaps he is missing the woods for the trees.

But surely, he is not wrong with his larger idea. Sooner or later the nation needs to answer the profound questions raised by Raj - for how long can we permit one way migration from a set of states to others in search of jobs?

The bumble bee paradigm

According to the established laws of physics, a bumble bee cannot fly. Physicists insist that the body of a bumble bee is not by nature aerodynamic and hence conducive to flying. Yet the fact of the matter is that the bumble bee flies. The only explicable reason provided by physicists is that the bumble bee does not understand the law of physics established by them and hence is not constrained by it! Obviously, had the bumble bee understood physics, it would never fly.

Perhaps a similar analogy could be extended to the success of people to the 'Right' of my imaginary line. A difficult terrain - most of this area is parched or semi-arid - makes agriculture difficult in this area. Similarly, this area cannot boast of any substantial mineral wealth.

Similarly, this area is neither suitable for setting up industries or agriculture, except in patches. Like the bumble bee, people of this area have really discarded theory and have gone on to write their own grammar of economic success.

In contrast, it may be noticed that most of the perennial rivers flow through the left of this line. Naturally, the Gangetic plain is one of the most fertile places for agriculture in India. This flow of perennial rivers make is further blessed by copious rains year after year making it theoretically possible for this place to become the granary for entire India.

Further, most of India's mineral wealth is located to the left of this line. All these factors combine to make this area an ideal place for business, trade or agriculture in India. Like their counterparts to the other side of the line, people here too have rejected all these theories. No wonder, extortion is one of the biggest industries in Bihar!

In effect, India to the 'Right' of my imaginary line is comparatively (and that is the operative word here) more industrialised, far better governed and enjoys a higher level of human development indices than India to the 'Left' of this line. That explains in a way the shift of Nano factory of Tata motors [Get Quote] from West Bengal to Gujarat.

Caste in economics, caste in politics

The answer to this contrasting development, achieved by people who are blessed in every possible way and those who are not, is indeed fascinating to say the least. How is it possible that in two distinct areas within a same country, governed by the same set of laws, rules and regulations, one is more relatively more prosperous than the other, especially given the fact that the latter has more natural resources?

The answer to this conundrum is perhaps as intriguing as the conundrum itself. It may not out of place to mention that the linkages between caste and economics (as they are with politics) are one of the most neglected aspects of economic and sociological studies in India.

The reason for the same is fairly obvious. Most economic theories in India are rooted in economic theories of the West. Since there is no caste in the west, western economists have the luxury of ignoring the impact of caste in their studies. But how can any one in India ignore caste, be it economic or politics?

Caste has been an important instrument of change in modern India. People to the 'Left' of this line - say in Bihar or UP have naturally associated caste with politics with an obvious belief that capturing political power through caste equations would deliver and emancipate them.

Naturally, politicians from these areas believe in portfolios like Railways, fertilisers or for that matter coal and mines that would facilitate them to deliver largesse to their own constituency through governmental interventions.

In a way caste in politics becomes important here. Politics and state power is sadly seen as an end in itself. This meant that private initiative was exterminated over the years in these states making virtually everyone dependent on government for employment

In contrast, people to the 'Right' of this line have traditionally leveraged their caste affiliations, not for capturing state power, but for strengthening their economics. Naturally, for these people caste is important for furthering their economic interests, while capturing state power through caste is incidental.

Bihar, UP or for that matter West Bengal cannot be exceptions to the global order of governments being incapable of delivering on growth and development. And having to this day believed that it is the government that would fully deliver on their growth and development, people to the 'Left' of this line are now caught in a bind.

Liberalised India, which unlike socialist India offers limited scope for the government itself. Naturally that translates into limited job opportunities. As opportunities shrink, naturally their tone gets shriller. That would explain the fixation with Railway recruitment, which provides for opportunities not only within their state but in others too.

It is this excessive reliance on the power of the government to deliver ignoring the natural resources and ability that has been at the root of the current problem in 'Left' India. Naturally, fifty per cent of our population living in this area have a choice to turn in Naxalites or to become an immigrant within the country. Either way it is not a happy situation as it puts extraordinary pressure on the rest of the country.

In effect, caste with politics in the absence of economics has been a wholesome disaster for some of these states while caste in economics with marginal assistance from politics has been a wholesome success. In effect, the present imbroglio is an issue between castes who have taken to politics and those who have taken to economics.

The only way out is rapid build up of confidence of business and businessmen in Bihar and UP and to ensure indigenous businesses in Bihar. Economic prosperity in these places must be ensured by local businesses, not by outsiders or their government.

Since it is a superhuman effort and cannot be done by ordinary mortals, will Laloo and Mulayam - the two caste leaders of these two states and considered supermen by their respective followers - give up politics and take to business? In the process they could do a world of good to India economics and to Indian politics.

PS: While the law of the land could well punish Raj, who will punish these politicians who have kept 'Left' India poor and created the problem in the first place?

Source: www.rediff.com/money/2008/oct/29guest4.htm

The author is a Chennai-based Chartered Accountant. He can be contacted at