India, a G8+5 economy of a billion people that boasts of one of the largest and youngest work forces globally, has elected a new leader. However, the size of the election may not be the most significant aspect of it. Neither are the almost month-long duration and the largest percentage turn-out in India's history. These large numbers and efficiently functioning elections have a much deeper consequence. India is today at the crossroads of a new narrative.
Despite the problems of poor governance, corruption, poor infrastructure, and an ever-dipping graph of economic growth, the Indian middle class is about to face the largest influx from the poorer classes of society. Estimates show that, before the turn of the decade, India and China alone will add over 200 million people to the middle class. This influx will eventually require a redefinition of what actually constitutes a middle class, especially in India. This is important as it will mean redefining the poverty line as well – and consequently, hopefully, taking a closer look at the needs of the poorer sections of society. This influx will require serious consideration on many fronts – two in particular are jobs and sustainability among the poor and lower classes.
As the situation currently stands, the quintessential left versus right battle ended with the right giving the left a hammering no one had expected. The Bharatiya Janta Party (BJP), led by front man superstar Narendra Modi, has built its campaign with jobs and economic development as its top agendas. Rahul Gandhi of the Indian National Congress, however, campaigned on the uplifting of the poorer classes. Modi's election to the Prime Minister's office ended Congress' 10 year period at the helm under the leadership of Prime Minister Manmohan Singh. Both parties ran with idealistic manifestos which looked passable on paper; however, implementation, execution, and diligence to reach the intended targets are where the government usually fails.
Congress' performance in the past ten years has been considered sub-par. Economic growth has fallen drastically every year after hitting the hallowed 8% growth mark in 2009-10. Lack of economic reform during the heyday, possibly the worst performance in urban job creation in decades, and a rapid rise in corruption have all contributed to a list Congress' failures. Even during the last elections, Congress campaigned on wanting to improve the standard of living of the poorest sections of society. Since 2005, Congress has tried to create multiple schemes to improve those standards; however, they have faltered in the defined policies and execution of many schemes.
For example, MGNREGA, more commonly called NREGA, aimed to guarantee the "right to work." In essence it provides 100 days of wage employment per household which can be shared between adults in a household. NREGA was formed in 2006 as a combination of two programs – Food For Work and Sampoorn Grameen Rozgar Yoganaj – both of which faced multiple implementation and execution problems. $18 billion USD was allocated to the program. The program's biggest success was its reach. In two years, the program had covered the whole of India. So far – good news, good intentions.
Sadly, this is as good as it gets. A government report in April 2013 revealed some telling facts. It highlighted a lack of awareness, mismanagement, and institutional incapacity as the three most significant issues with the program. The report stated that only about nine out of 100 poor people who should have access to the scheme actually do have access. Other social audits by non-profit and civil society groups cited widespread corruption within the program as a major issue. Additional critics, like Gurcharan Das, have also called for disbandment of the scheme on the basis of the money not being used for creating "productive assets." In all, a very ambitious and well-intentioned scheme with high possibilities had fundamental issues in its structure and execution. The onus for the failure falls on the government in charge of running the scheme.
Another act passed by the previous ruling Congress Party, which has faced strong criticism, has been the National Food Security Act. This act subsidizes food grains to approximately two-thirds of India, which is roughly 800 million people. It also has clauses which provide pregnant women, lactating mothers, and adolescent children with rations for free. The cost of providing these subsidies is estimated at $22 billion USD, almost 1.5% of the Indian economy. The bill's most notable advocates, are Congress President Sonia Gandhi, National Advisory Council member Jean Dreze, and Minister of Consumer Affairs K. V. Thomas. These proponents argue the positive effect of the bill and its impact on people's lives.
When big government money is involved, however, there is always opposition. However, this particular act seemed to draw special attention. Because the bill was proposed less than a year from the 2014 Lok Sabha elections, it gave rise to opponents yelling "vote politics," raising valid arguments about its timing, as there had only been dismissive talk about it before. A report from the Technical Advisory Committee on Monetary Policy predicts the act will cause food prices to rise steadily because of a mismatch in supply and demand. Other specialists claim the cost of implementation to be miscalculated and expect the strain on the GDP to be closer to 3% as opposed to the 1.5% estimate.
With the new government in power, assumptions regarding BJP's intentions can only be drawn from their mandate. Though there is no mention of doing away with NREGA, they have mentioned job creation for the rural poor, with proposed methods like setting up agro-food processing clusters and food-processing facilities to target farmers and downstream members of the food supply chain. The BJP's manifesto gives an incoherent description of generating jobs by "promoting" horticulture, pisciculture, beekeeping, etc. The BJP has tried to promote the creation of jobs as a consequence of setting up more industrial and agricultural units, but it has not taken into account the economic strain these initiatives would have, or the execution headaches that go with running such ambitious programs.
Regarding the Food Security Act, the BJP does not propose anything drastically different, which means that their solution would come under the same scrutiny as Congress's scheme does. BJP does add one point in its favour, by talking about seeking partnerships with voluntary organizations. There is an overall emphasis of using common sense to solve problems without corruption.
While Modi is a highly divisive figure, he has a reputation as a strong decision maker and a history of fostering positive economic growth. With the BJP now in power, the only hope is that they will concentrate on the proper execution of realistic plans, as opposed to making lofty comments and appeasing the public after failing to follow through.